Following the swift demise of cryptocurrency exchange FTX, BlockFi Inc. declared bankruptcy as the latest cryptocurrency company to go under.
In a statement released on Monday, BlockFi stated that it would use the Chapter 11 procedure to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities.” BlockFi also noted that recoveries would likely be delayed by FTX’s own bankruptcy. A business that files for Chapter 11 bankruptcy is still able to run while formulating a repayment strategy for its creditors.
The assets and liabilities of BlockFi are listed in the petition as being between $1 billion and $10 billion each in the state of New Jersey. The business stated in the statement that it is initiating an “internal strategy to drastically decrease spending, particularly employee costs,” and that it currently has about $257 million in cash on hand.
The Jersey City, New Jersey-based firm earlier suspended withdrawals and declared it was investigating “all possibilities” with outside consultants, citing “a lack of information” over the situation of insolvent FTX and Alameda Research.
One of the company’s largest unsecured creditors, FTX US, is described in the petition as having a $275 million debt.
Ankura Trust Company, the company’s biggest unsecured creditor, is due around $729 million, according to the petition. According to BlockFi’s website, Ankura serves as a trustee for the interest-bearing crypto accounts.
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