BlockFi Declares Bankruptcy, Sues FTX Founder SBF! Why Analysts Say "Cryptocurrency is Dead"

By    6 Dec,2022

 With the aftershocks of the FTX bankruptcy still fresh, cryptocurrency company BlokcFi has filed for bankruptcy in a U.S. court, making it the latest company to collapse in the cryptocurrency space due to its close financial ties to FTX.


According to the New York Times, BlockFi was primarily a cryptocurrency finance company that offered investors cryptocurrency loans without credit checks and high-interest cryptocurrency savings services to the public, claiming to have 450,000 users by the end of 2021.

Another Cryptocurrency Platform Fails, BlockFi Files for Bankruptcy

In an official statement, BlockFi said that eight of its subsidiaries have filed for bankruptcy protection under Chapter 11 of the bankruptcy code, and revealed that it currently has about $257 million in cash on hand, which is enough to cover the bankruptcy process. But since FTX is in bankruptcy, it is expected to take some time to complete.

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BlockFi was threatened with bankruptcy when TerraUSD and Luna decoupled from the U.S. dollar in May of this year and most of their value evaporated. In fact, its competitors Celsius Network, Voyager Digital and other platforms have since filed for bankruptcy.

BlockFi had relied on FTX support to survive the TerraUSD collapse, but now, with the collapse of FTX, it too has had to declare bankruptcy.

However, with the FTX in crisis, BlockFi can not escape the fate of bankruptcy, November 11 FTX filed for bankruptcy on the same day, they also suspended withdrawals on the platform. "We, like everyone else, only found out about the situation by reading Twitter. At the time BlockFi said in a letter, "We are very shocked and saddened by the news of FTX and Alameda.

Read more: FTX bankruptcy storm is not over yet! Affiliate BlockFi is also filing for bankruptcy

According to information disclosed by BlockFi, they have roughly 100,000 creditors, and $10 billion in assets and liabilities. Even though the company employed a total of 850 employees last year, the bankruptcy filing has also resulted in the layoff of the vast majority of them.

It's worth noting that BlockFi pointed out that Alameda Research owed $680 million in mortgage loans, claiming that they had signed an agreement with Emergent Fidelity Technologies, a subsidiary of SBF, to pay BlockFi.

SBF acquired a 7.6% stake in Robinhood in May of this year, worth a total of $648 million.




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