BlockFi, a cryptocurrency lender, declared bankruptcy in the United States on November 28. As a result, BlockFi has become the latest company in the cryptocurrency industry to be harmed by the collapse of the beleaguered exchange FTX.

BlockFi had been in trouble since the spring, when several large crypto firms went bankrupt, sending the market into a frenzy and causing the value of cryptocurrencies like Bitcoin to plummet by 20% in a week. Soon after, two more crypto lenders, Celsius Network and Voyager Digital declared bankruptcy.


In June, FTX agreed to provide the crypto lender with a $400 million credit line, which would have provided “access to money that further strengthens our balance sheet,” according to CEO Zac Prince. The agreement also included the option for FTX to acquire BlockFi.

However, as a result of the transaction, BlockFi became financially intertwined with FTX, and its future became more questionable when the accounts for all of FTX’s corporate blunders and suspicious management came to light this month. As it turned out, the trade imploded just a few days after the discoveries. When FTX went bankrupt a few weeks ago, cryptocurrencies were at risk. It was one of the most popular bitcoin trading sites. 

Crypto Fate

BlockFi, a platform that has already followed suit and filed for bankruptcy protection, was perhaps one of the firms likely to be impacted the hardest. The news came after weeks of speculation that BlockFi’s future was at risk, culminating in today’s filings.

BlockFi stated that its assets and liabilities ranged from $1 billion to $10 billion. Renzi stated that BlockFi liquidated a chunk of its crypto assets to support its bankruptcy earlier in November. These sales raised $238.6 million in cash, giving BlockFi a total cash balance of $256.5 million.

BlockFi named FTX as its second-largest creditor in a court statement on Monday. It owes $275 million on a loan provided earlier this year. It has stated that it owes money to over 100,000 creditors. In a separate filing, the company stated that it expects to lay off two-thirds of its 292 employees.

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