BlockFi Prepares For Bankruptcy Following The Fall Of FTX
BlockFi Prepares For Bankruptcy Following The Fall Of FTX.
On November 14th, crypto lender BlockFi admitted to having had “significant exposure” to FTX, now it seems that the company may be struggling with its finances, being on the brink of filing for bankruptcy.
Preparing For Bankruptcy
Despite claiming that they had “the necessary liquidity to explore all options” earlier this week, the Wall Street Journal reports that crypto lender BlockFi is actually preparing a potential bankruptcy filing.
According to Decrypt, aside from considering filing for Chapter 11 bankruptcy protection, BlockFi has also talked with major crypto exchange Binance, looking for possible financial help to keep their platform running.
Related: Circle Has a $10.6 million Investment in FTX Group
Paused Withdrawals
This news comes following the announcement that BlockFi had paused all of its customers’ withdrawals last Thursday after FTX’s initial fall.
“The rumors that a majority of BlockFi assets are custodied at FTX are false,” BlockFi wrote to it’s customers on Monday.
“That said, we do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX US.”
— BlockFi (@BlockFi) November 11, 2022
Aside from BlockFi, many other crypto companies have been suffering from the effects of FTX’s bankruptcy filing, with multiple companies halting withdrawals and activities on their platform. Crypto lending platform SALT for example, recently revealed to be pausing withdrawals as well as Japanese crypto exchange Liquid halting its customers’ withdrawals on its platform.
Related: Here’s Crypto Exchange That Has Published Theirs Proof of Reserves
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