Crypto Lender BlockFi Bankruptcy Live Updates
In a press statement by Mark Renzi, Managing Director of Berkeley Research Group, it says, “BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.” The Research Group serves as a financial advisor to BlockFi and has been hired to look into bankruptcy proceedings.
Renzi, as he puts it, the “death spiral” has spread all across the crypto market. It was predicted for the past few weeks that BlockFi is getting bankrupt, however, now it’s official in a 41-page legal filing. In this filing, Renzi walks its investors, creditors, and legal authorities through the happenings at the helm of the firm, right now. He mentions that there are two major reasons for the situation of BlockFi- the collapse of FTX and the declining global crypto market. Renzi points out the settlement of 30 million USD with the SEC. He is being optimistic that despite the fact that 2022 has been a bad year for the crypto market, recovery will be seen in the coming year. Renzi also argues that the intervention from FTX in May-June this year has worsened things for BlockFi.
Unfolding Of BlockFi’s Bankruptcy Step By Step
The crypto firm BlockFi has filed for Chapter 11 bankruptcy protection in the United States. Following the collapse of its reputed acquirer FTX.
The filing recorded a pending 275 million USD loan to the exchange firm FTX. In the filing, the company registered that it has more than 100,000 creditors with liabilities and assets ranging somewhere between 1 billion USD to 10 billion USD.
Its Bermuda-based subsidiary has also filed for bankruptcy alongside the American subsidiary. Both the Bahamas and Bermuda had given the green signal to the crypto industry and thought of it as the future. However, the failure of FTX, a Bahamas-based firm, and BlockFi, a Bermuda-based company, would definitely push them to think about their decision.
The withdrawal have been already halted a few weeks ago following the ongoing confusion about FTX’s assets. It liquidated a lot of clients in the early months of 2022 and needed FTX to support it. FTX stepped in in July to lend approximately 400 million USD.
The company which was doing extremely well was last valued at 4.2 billion USD. It was looking to go public in the next 18 months. It had raised billions of dollars and the next would have been 500 million USD in funding.
FTX Saga And Block Fi
FTX filed for bankruptcy on November 11, 2022, in the United States. It was once a billion-dollar empire. Founded by Sam Bankman-Fried, it dried up in a matter of few days. The aftermath of the failure of a leading exchange was swiftly felt all across the crypto market. BlockFi is one of the firms adversely affected by the debacle.