Cryptocurrency lender BlockFi has filed for bankruptcy as contagion from the $8 billion U.S. collapse of crypto exchange FTX spreads around the world.
The company said in a written statement that it is filing for Chapter 11 protection from its creditors in order to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX.”
In its bankruptcy filing, BlockFi listed assets of $1 billion U.S. and liabilities of $10 billion U.S. The company said it currently has $257 million U.S. of cash on hand.
In recent days, the Jersey City, New Jersey-based crypto lender halted all customer withdrawals and said it was exploring “all options” to restructure its finances.
BlockFi had a credit line with FTX and loans with FTX sister company Alameda Research worth $275 million U.S. when those companies filed for bankruptcy. BlockFi was also shifting its assets to FTX for custody when the exchange suddenly collapsed, citing $8 billion U.S. in losses.
BlockFi’s largest creditor, Ankura Trust Company, is owed $729 million U.S., according to the bankruptcy filing.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez. The lender was one of the first in the cryptocurrency sector to provide interest-bearing accounts with returns paid in Bitcoin (BTC) and Ethereum (ETH).
The company had offices in New York, New Jersey, Singapore, Poland, and Argentina. BlockFi was valued at $3 billion U.S. in a March 2021 funding round.
