Cryptocurrency Lender 'BlockFi' Files For Bankruptcy Citing FTX Collapse

On Monday, the United States cryptocurrency lender BlockFi announced that it had filed for Chapter 11 bankruptcy protection along with eight affiliates in a court in New Jersey.?

BlockFi is the latest company to be targeted since FTX went down earlier this month, making the cryptocurrency market unstable.

BlockFi, based in New Jersey, has claimed in a court filing that it owes money to more than 100,000 creditors.?

The filing was made in a court in New Jersey when cryptocurrency prices were collapsing, with bitcoin dropping by more than 70 percent from its peak in 2021.

It cited the cryptocurrency exchange FTX as its second-largest creditor, with a debt load of $275 million on loans extended earlier this year.

The Ankura Trust, which acts as a representative for creditors in challenging situations and is owed a total of $729 million by the corporation, is the entity that holds the position of the company's largest creditor.

BlockFi had already stopped withdrawals from its platform and admitted that it had "significant exposure" to FTX and its related companies.

This decision was made several weeks after FTX filed for protection from creditors under U.S. bankruptcy law and its founder, Sam Bankman-Fried, resigned as chief executive officer.

After the price of the cryptocurrency lender dropped a lot earlier in the year, FTX and BlockFi made a deal in July to give BlockFi a revolving credit facility with a maximum limit of $400 million and the option to buy the business for up to $240 million.?

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