The Collapse of FTX Led to the Bankruptcy of the Crypto Firm BlockFi
Crypto company BlockFi has filed for bankruptcy. Its representatives have already petitioned the US Supreme Court to start the liquidation process.
In November of this year, the FTX cryptocurrency exchange went through a difficult test, faced with a mass withdrawal of people's money. Its founder, Sam Bankman-Fried, made the difficult decision to leave, and the exchange officially filed for bankruptcy. The collapse of FTX caused reputational damage to the cryptocurrency industry, negatively affected this area as a whole, and further focused the attention of regulators on it.
On November 28, the BlockFi crypto platform, founded in 2017 and registered in Bermuda, filed for bankruptcy. In this regard, many actions on it are now suspended, including the ability to withdraw money. Representatives of the company have already begun to cooperate with the judiciary, resolving issues of protection, restructuring and phased repayment of existing debts, as well as the return of funds to investors. The main reason for the bankruptcy of BlockFi is the collapse of FTX, because the crypto firm issued loans and provided a number of other financial services, providing them with assets located on this particular exchange. FTX went bankrupt — and, of course, there was no money.
The total number of BlockFi creditors exceeds 100,000. The Reuters news agency clarifies that the crypto platform has to pay approximately $3.1 billion — and this is only the 50 most solid creditors. For example, Ankura Trust Company, LLC — $729 million, while West Realm Shires Inc. — $275 million.
Mark Renzi of the financial advisory firm Berkeley Research Group, who advises BlockFi on financial matters, emphasized that the crypto platform has always made every effort to create a positive reputation for the cryptocurrency space. In turn, the representatives of the company noted that they have high hopes for the honesty of the trial and wish all interested parties to get the best result for them.