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BlockFi files for bankruptcy in wake of FTX collapse

BlockFi files for bankruptcy in wake of FTX collapse

BlockFi, the cryptocurrency player that needed a $400 million credit facility from FTX earlier this year, has now filed for bankruptcy.

In a statement, BlockFi says it has filed for Chapter 11 in New Jersey to "stabilise" its business and "consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders".

The move had been widely anticipated since the firm paused activity, including withdrawals, on its platform earlier this month.

Having raised funds at a $3 billion valuation in 2021, BlockFi has seen its business fall apart in the face of this year's crypto winter and wider economic downturn.

In July, it turned to FTX for the line of credit in a deal that also gave Sam Bankman-Fried's now-failed business the option to buy BlockFi.

BlockFi now says it will focus on recovering all obligations owed to it, including by FTX. However, it warns: "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.

BlockFi says it has $256.9 million in cash on hand, "which is expected to provide sufficient liquidity to support certain operations during the restructuring process".

The firm estimates it has more than 100,000 creditors, and between $1 and $10 billion in both assets and liabilities.

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