BlockFi files for bankruptcy, cites FTX collapse for its troubles
BlockFi introduced on Nov. 28 that it had filed for Chapter 11 chapter. The filing in the US Chapter Court docket for the District of New Jersey pertains to the corporate and its eight subsidiaries. The transfer comes after a number of days of hypothesis on the corporate’s monetary well being after the collapse of FTX.
Based on a statement, BlockFi has $256.9 million readily available. It has filed motions “to pay worker wages and proceed worker advantages with out disruption.” It additionally seeks to “set up a Key Worker Retention Plan to make sure the corporate retains skilled inside assets for business-critical features” and has created an inside plan to cut back bills.
BlockFi Worldwide has additionally filed for chapter with the Supreme Court docket of Bermuda, in line with the assertion.
As we speak, BlockFi filed voluntary circumstances below Chapter 11 of the U.S. Chapter Code.https://t.co/adaAx6me4r
— BlockFi (@BlockFi) November 28, 2022
FTX US obtained a $400-million credit score line on the finish of June, resulting in worries after the FTX collapse that BlockFi’s publicity would trigger it to expertise a liquidity disaster. BlockFi halted withdrawals on Nov. 11. In an replace on its web site, the corporate writes:
“Because the pause, our crew has explored each strategic possibility and different out there to us, and has remained laser-focused on our main goal of doing the very best we are able to for our shoppers. These Chapter 11 circumstances will allow BlockFi to stabilize the enterprise and supply BlockFi with the chance to consummate a reorganization plan that maximizes worth for all stakeholders, together with our valued shoppers.”
The corporate additionally tweeted, “As a part of our restructuring efforts, we’ll give attention to recovering all obligations owed to BlockFi by counterparties, together with FTX.”
Within the checklist of prime 50 collectors filed within the courtroom paperwork, unsecured claims vary from $275 million to West Realm Shires Inc. (FTX US) to $999,650 to an unidentified creditor. It reveals a debt of $30 million to the U.S. Securities and Change Fee.
BlockFi reached a settlement with the SEC for $100 million in February for failing to register accounts the SEC deemed securities. West Realm Shires and the SEC have been listed by identify within the doc, as was Ankura Belief, which supplies company belief companies “in distressed conditions.” That group is owed $729,036,246. As well as, BlockFi states within the submitting that it has over 100,000 collectors, property between $1 billion and $10 billion, and liabilities in the identical vary. As well as, Valar Ventures is listed because the proprietor of 19% of the shares within the firm.
BlockFi simply deleted their crew web page. I depart it right here, so the place your valuable #Bitcoin are.
REMEMBER: Not your keys, not your cash. pic.twitter.com/BFJbV2UD3W
— Carl ₿ MENGER ⚡️ (@CarlBMenger) November 17, 2022
BlockFi denied that almost all of its property have been custodied at FTX, however it acknowledged, “We do have vital publicity to FTX and related company entities that encompasses obligations owed to us by Alameda, property held at FTX.com, and undrawn quantities from our credit score line with FTX.US.”
