BlockFi Files For Bankruptcy : BlockFi Net Worth | BlockFi Coin Investors

BlockFi, a cryptocurrency lending company, filed for bankruptcy in order to “stabilise its business” because investors are still reeling after the collapse of FTX.

In order to give the business the “opportunity to effectuate a thorough restructuring transaction that maximises value for all clients and other stakeholders,” BlockFi and eight of its affiliates have filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of New Jersey.

According to Mark Renzi of Berkeley Research Group, the company’s financial advisor, “With the crash of FTX, the BlockFi management team and board of directors swiftly took measures to protect consumers and the Company.”

The court filing in New Jersey comes as cryptocurrency prices have fallen sharply. The cost of bitcoin, by far the most widely used digital currency, has decreased by more than 70% since its peak in 2021.

BlockFi Net Worth

BlockFi, a company situated in New Jersey and owned by former finance executive turned cryptocurrency entrepreneur Zac Prince, claimed in a bankruptcy petition that a liquidity crisis was brought on by its significant exposure to FTX. Sam Bankman-Fried, the founder of FTX, filed for protection in the US this month after investors withdrew $6 billion from the exchange in just three days and Binance, a rival exchange, abandoned a rescue plan.

According to the bankruptcy filing by Mark Renzi, managing director at Berkeley Research Group, the proposed financial advisor for BlockFi, “Although the debtors’ exposure to FTX is a primary cause of this bankruptcy petition, the debtors do not suffer the many concerns reportedly confronting FTX.” “Quite the contrary,”

According to BlockFi, the liquidity problem was brought on by both coins locked on FTX’s platform and its exposure to FTX through loans to Alameda, a crypto trading company connected to FTX. According to BlockFi, its assets and liabilities range between $1 billion to $10 billion.

BlockFi Coin Investors

During the pandemic, crypto lenders—the de facto banks of the cryptocurrency world—exploded, luring ordinary clients with double-digit rates in exchange for their cryptocurrency deposits.

Unlike traditional lenders, crypto lenders are not allowed to keep capital or liquidity buffers, and several of them found themselves exposed when a lack of collateral forced them—and their customers—to bear significant losses.

Tuesday will mark the first bankruptcy hearing for BlockFi. An inquiry for comment from FTX was not answered.

“Acting in the best interest of our clients is our top priority and continues to guide our path forward,” BlockFi said.