Nov 16, 2022
Crypto Lender BlockFi Plans Bankruptcy Filing Within Days in FTX Fallout
(Bloomberg) -- Cryptocurrency lender BlockFi Inc. is preparing to file for bankruptcy within days, according to people with knowledge of the matter who asked not to be named because discussions are private.
The crypto lender paused client withdrawals, citing uncertainties with FTX, while saying it had adequate liquidity and was exploring options with outside advisers.
A representative for BlockFi declined to comment. The Wall Street Journal earlier reported that the company was weighing a bankruptcy filing.
FTX US and BlockFi are closely tied. In July, FTX US provided the lender with a $400 million revolving credit line, which came with an option to purchase the company. And BlockFi has given loans to now-bankrupt Alameda Research, Bloomberg reported.
The sudden unraveling and subsequent bankruptcy of FTX -- once seen as a savior to struggling crypto firms -- is reverberating across the digital asset landscape. Bankrupt Voyager Digital Ltd., which Sam Bankman-Fried was going to rescue in a $1.4 billion deal, is now scrambling to find a replacement buyer for its assets. And Genesis is exploring options after suspending redemptions and new loan originations amid a liquidity shortfall.
--With assistance from Yueqi Yang and Hannah Miller.
©2022 Bloomberg L.P.