BlockFi Heads to Chapter 11
Posted by Colin Lambert. Last updated: November 28, 2022
The fallout from the FTX collapse continues in the cryptoverse with BlockFi filing for Chapter 11 bankruptcy in the US.
The firm originally hit trouble earlier this year but was bailed out by FTX in what was hailed as a “landmark deal” by both companies, by means of a $250 million loan.
In a filing, BlockFi says as part of its restructuring efforts, it will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities. It what may be the understatement of the year, BlockFi adds, “Due to the recent collapse of FTX and its ensuing bankruptcy process, which remains ongoing, the Company expects that recoveries from FTX will be delayed.”
The firm says it has $256.9 million of cash on hand, which is “expected” to provide sufficient liquidity to continue certain operations during the restructuring process – platform activity has been, and will remain, halted.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” says Mark Renzi of Berkeley Research Group, BlockFi’s financial advisor. “From inception, 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.”