BlockFi files for chapter 11 bankruptcy

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BlockFi filed for chapter 11 bankruptcy on November 28, soon after the platform revealed its exposure to the now-fallen FTX cryptocurrency exchange.

According to bankruptcy filings in New Jersey, BlockFi had assets and liabilities ranging from $1 billion to $10 billion, with over 100,000 creditors.

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The firm further stated that due to the recent collapse of FTX, the company expects that "recoveries from FTX will be delayed," spurring a surge of panic among its users.

The fall of BlockFi

Prominent crypto lending platform BlockFi is the latest victim of the FTX-Alameda collapse, which ultimately led the firm to file for chapter 11 bankruptcy on Monday.

The lender is backed by a long list of well-known investors, including Coinbase, the Winklevoss Twins, and Peter Thiel's Valar Ventures.

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In a recently released press statement, BlockFi shared how the company is planning to recover funds from its counterparties, including the collapsed FTX crypto exchange. The company later added that recoveries from FTX may be delayed considering its ongoing bankruptcy.

The crypto lender had reportedly taken steps to liquidate some of its owned cryptocurrencies to improve its cash reserves so that the company could fund its administrative expenses.

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BlockFi has had a rough year with mounting losses and failures that played a critical role in jeopardising the firm's position as a leading crypto lending platform.

After bearing significant losses worth $285 million, BlockFi struck a deal with the now-defunct FTX crypto exchange that included a $400 million revolving credit facility from FTX. US, coupled with an offer initiated by FTX to buy BlockFi at a "variable price."

The statement further adds how BlockFi currently has $275 million in cash, which it intends to deploy internally to run certain administrative operations during its bankruptcy proceedings.

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