Another One Bites The FTX Dust: BlockFi To File For Bankruptcy, Cut Jobs

Leaked documents show firm has liabilities around $1 billion – $10 billion and owes the Securities and Exchange Commission $30 million.

The FTX implosion continues to unravel long after the crypto exchange’s bankruptcy has been finalized. Crypto lender BlockFi is reportedly planning to file for chapter 11 bankruptcy today.

According to a source who told Decrypt, the firm will also lay off a large portion of its staff.

In recent leaked documents, BlockFi seems to be reporting more than 100,000 creditors, with total estimated liabilities between $1 billion – $10 billion. Also, in the list of creditors with the 50 largest unsecured claim, one for the firm’s creditors is the Securities and Exchange Commission listed down for $30 million–apparently from a settlement claim yet to be processed.

West Realm Shires, also known as FTX’s US arm, is listed as a creditor for $275 million–the firm’s second biggest unsecured creditor.

The firm reportedly declared it has $256.9 million in cash on hand against the rumored liabilities.

The report comes weeks after BlockFi disclosed that it has positions in the now bankrupt exchange and extended loans to its sister hedge fund Alameda Research.

“The rumors that a majority of BlockFi assets are custodied at FTX are false. That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” the lender then said in its blog.

Prior to that, BlockFi announced that it would be ”limiting platform activity”–including pausing withdrawals–following the uncertainty posed by the situation with FTX; back then, the firm wasn’t yet upfront with the amount of exposure it has to the crypto exchange’s downfall.

This is a complete turnaround from the statements tweeted just two days before by BlockFi Founder and COO Flori Marquez, underlining then that ”all BlockFi products are fully operational.”

Should the crypto lender file for bankruptcy, it is one of the many firms who have been taken down or suffering liquidity crunches following FTX’s own downfall. Genesis Global’s lending arm announced that it is temporarily freezing redemptions and new loan originations after declaring it has around $175 million locked in FTX. 

READ: Moonstone Bank Is “Still Waiting” To See What Happens With FTX/Alameda $11.5 Million Seed Investment

Ikigai Asset Management also revealed its exposure to FTX earlier this month, resulting in the firms halting their respective withdrawals. In its Q3 2022 report, Galaxy Digital reportedly had around $76.8 million in cash and digital assets invested in the embattled crypto exchange, around $47.5 million of which is in the process of being withdrawn.

Back in June, FTX got close to acquiring BlockFi at a 99% discount—FTX was reportedly to pay just $25 million for BlockFi, which last summer held a valuation of $4.8 billion.


Information for this briefing was found via Decrypt and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

FTX Creditors Unhappy With Receiving $16,781 Per Bitcoin Under Proposed Repayments

It turns out that some FTX creditors are unhappy with claims that they are being...

Saturday, February 3, 2024, 11:40:00 AM

In A Nutshell: How FTX Fell From Grace, According To Sam Bankman-Fried Himself

Much has been said about crypto exchange FTX and its embattled leader Sam Bankman-Fried on...

Tuesday, November 15, 2022, 12:57:00 PM

Ontario Teachers’ Pension Plan Invested $95M In Now-Imploded Crypto Exchange FTX

It appears the FTX carnage has no end: the crypto exchange’s disappearing fortunes have left...

Friday, November 11, 2022, 01:14:38 AM

Who is the FTX Attorney That Bribed the Bahamian Gov’t?

A recent report from the FTX bankruptcy team has unveiled shocking revelations about the failed...

Tuesday, June 27, 2023, 10:19:00 AM

Court Greenlights FTX’s $16.5 Billion Customer Reimbursement Plan

FTX has received court approval for its bankruptcy plan, allowing it to repay customers using...

Tuesday, October 8, 2024, 10:12:56 AM