Cryptocurrency lending giant BlockFi on Monday has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey as the company failed to weather the storm triggered by the FTX collapse.
According to a press release, BlockFi's eight affiliates have also filed for bankruptcy to "stabilize business" and get the opportunity to "consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders."
With the filing, BlockFi says it wants to focus on "recovering all obligations" owed not only to BlockFi users, but also FTX and its associated corporate entities. The company says it has around $257 million in cash on hand, which will be used to support the restructuring process.
According to the court documents, BlockFi — which was valued in a moment at $4.8 billion — had over 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.
BlockFi's bankruptcy comes after its main creditor cryptocurrency exchange FTX had also filed for bankruptcy. According to the bankruptcy proceedings, the exchange had around $9 billion in liabilities while only having a slightly over $1 billion in liquid assets.
