Crypto lending platform BlockFi is set to file for Chapter 11 bankruptcy on Monday, November 28. This is reported Decrypt with a link to the source.
According to press releaseBlockFi, and eight subsidiaries have filed in bankruptcy court for the District of New Jersey.
“As part of its restructuring efforts, the company will focus on recovering all liabilities to BlockFi from its counterparties, including FTX,” the company said in a statement.
Bermuda-registered BlockFi International Ltd. filed a petition with the Supreme Court for the appointment of temporary liquidators.
“In order to ensure a smooth transition to Chapter 11, BlockFi is filing a series of conventional motions with the court to allow the company to continue in business. These Day One petitions include requests to pay salaries to employees and continue to pay benefits without disruption,” the platform said.
BlockFi intends to develop a key employee retention plan to ensure that resources are kept for critical functions.
“The company today also initiated an internal plan to significantly reduce costs, including labor costs,” BlockFi added.
According to the platform, it has $256.9 million on hand, which “will provide sufficient liquidity to support certain operations in the restructuring process.”
According to application BlockFi has over 100,000 creditors. The company’s assets and liabilities are estimated at $1 billion to $10 billion.
The largest creditors are Ankura Trust Company, LLC (outstanding liabilities of approximately $729 million), West Realm Shires Inc. ($275 million) and the US Securities and Exchange Commission ($30 million). The names of the rest are not revealed.
According to the source of the publication, BlockFi will fire most of the team.
On November 8, the founder of the platform, Flory Marquez, announced that all the company’s products are “fully operational”, and the business does not depend on the Sam Bankman-Fried exchange.
However, on November 11, BlockFi statedthat it will not be able to conduct business as usual and will restrict operations due to lack of clarity regarding the status of FTX and Alameda Research. The platform has suspended withdrawals and advised users to refrain from making deposits.
Same day FTX Group filed for bankruptcyand Bankman-Fried stepped down as CEO.
November 14 refuted information that most of its assets are held on FTX. At the same time, the company admitted that the platform has a credit line, submitted the American division of the exchange, as well as outstanding obligations from Alameda Research.
On November 16, The Wall Street Journal sources reported that BlockFi prepares to apply regarding insolvency.
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