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.
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.