Another major crypto firm ‘BlockFi’ has now been significantly affected by the damaging ripple waves caused by the FTX burning collapse just weeks ago. BlockFi which operated as a crypto currency lender just filed for bankruptcy in the US.
BlockFi which was already facing troubles way before the FTX collapse actually received a rescue deal from FTX following the last crypto market crash.
However now with FTX under deepwaters, the troubles BlockFi was facing only went on to increase. BlockFi which is quite famous around crypto borrowers termed the FTX collapse and bankruptcy as “shocking”.
The FTX collapse was one of the biggest wealth declines ever, bringing down billionaire CEO Sam Bankman Fried’s Wealth by 94% in just one night. Being the third biggest crypto exchange, the fall of FTX has pushed the whole industry downwards causing massive problems.
BlockFi, which is also devastated by the industry collapse, has revealed that it owes money to around 100,000 creditors. FTX apparently is BlockFi’s second biggest creditor; the firm owes around $275 million on a loan to FTX.
BlockFi also owes around $30 million to US financial regulator, the Securities and Exchange Commission. The SEC just earlier this year reported BlockFi as having misled customers into higher risk investments.
The crypto lending firm currently has around $275 million on hand and will probably look towards a structural reorganization that maximizes value for stakeholders and clients.
“From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders” says BlockFi’s financial advisor Mark Renzi.