Accordingly, BlockFi Inc and its 8 subsidiaries have become the latest victims from the collapse of FTX. All filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of New Jersey. Although quite unfortunate, it seems that BlockFi’s collapse is an inevitable consequence.
The company’s bankruptcy filing claims the number of creditors could be as high as 100,000. BlockFi’s remaining assets range from $1-10 billion, with liabilities also $1-10 billion. BlockFi’s remaining cash on hand is $256.5 million, with $238.6 million in revenue from the sale of crypto assets in November.
BlockFi’s largest creditors are Ankura Trust ($729 million), FTX US ($275 million), the US Securities and Exchange Commission (SEC) ($30 million), and many other undisclosed individual creditors.
In fact, BlockFi was close to bankruptcy once after the Terra crisis in May 2022. Fortunately, after several rounds of negotiations, BlockFi agreed to FTX US acquisition deal for about $240 million. However, as FTX crashed, FTX US also declared bankruptcy. This prevented FTX US from continuing the BlockFi acquisition as planned. 2 weeks ago, at the time when FTX fell, BlockFi also halted customer withdrawals.
BlockFi on Monday also sued a holding company for Bankman-Fried, seeking to recover shares in Robinhood Markets Inc (HOOD.O) pledged as collateral three weeks ago, before BlockFi and FTX filed for bankruptcy protection.
In its Q2/2022 performance report, BlockFi said it still manages $3.9 billion in assets but has lent out $1.8 billion, of which $600 million is non-mortgaged loans.
According to Decrypt, along with the bankruptcy announcement, BlockFi will lay off a large number of employees to cut operating costs. Previously, in June, the company also parted 20% of its total 850 workforces.
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