FTX Contagion Spreads As BlockFi Files For Chapter 11 Bankruptcy Protection

HomeCrypto lending
Share this article
Subscribe for weekly updates
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Zac Prince; Photo Source: Yahoo Finance
According to BlockFi’s blog post, “[The] Chapter 11 cases will enable BlockFi to stabilize the business and provide BlockFi with the opportunity to consummate a reorganization plan that maximizes value for all stakeholders, including our valued clients.”

BlockFi emerged as the latest victim of FTX’s collapse as the crypto lender and eight of its associate firms filed for bankruptcy.

In June, BlockFi received a $250M loan from FTX in addition to collateralized loans from Alameda Research, FTX’s sister firm. 

Earlier this month, BlockFi suspended withdrawals soon after FTX declared bankruptcy.

Now, the crypto lender has filed for Chapter 11 bankruptcy protection in a New Jersey Bankruptcy Court. BlockFi mentioned in its court filing that it owes money to over 100K creditors. BlockFi estimated its liabilities to range between $1B and $10B. The crypto lender also noted that FTX is its second largest creditor.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Mark Renzi, the Managing Director of BRG Corporate Finance, noted,

“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company.”

In its press release, BlockFi revealed that currently it has $256.9M in cash which will aid the lender in carrying out “certain operations” during the restructuring procedure. BlockFi seeks to receive Court approval to continue paying employee benefits. 

According to BlockFi’s blog post, “[The] Chapter 11 cases will enable BlockFi to stabilize the business and provide BlockFi with the opportunity to consummate a reorganization plan that maximizes value for all stakeholders, including our valued clients.”

BlockFi emerged as the latest victim of FTX’s collapse as the crypto lender and eight of its associate firms filed for bankruptcy.

In June, BlockFi received a $250M loan from FTX in addition to collateralized loans from Alameda Research, FTX’s sister firm. 

Earlier this month, BlockFi suspended withdrawals soon after FTX declared bankruptcy.

Now, the crypto lender has filed for Chapter 11 bankruptcy protection in a New Jersey Bankruptcy Court. BlockFi mentioned in its court filing that it owes money to over 100K creditors. BlockFi estimated its liabilities to range between $1B and $10B. The crypto lender also noted that FTX is its second largest creditor.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Mark Renzi, the Managing Director of BRG Corporate Finance, noted,

“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company.”

In its press release, BlockFi revealed that currently it has $256.9M in cash which will aid the lender in carrying out “certain operations” during the restructuring procedure. BlockFi seeks to receive Court approval to continue paying employee benefits. 

Written by
Ayush Pande