Blockfi filed for bankruptcy, becoming the latest casualty of the financial contagion unleashed by the collapse of Sam Bankman-fried’s empire.
The cryptocurrency lender, announced on Monday that it had applied for Chapter 11 bankruptcy protection in a New Jersey court along with eight affiliates. This makes BlockFi the latest victim of market instability brought on by FTX’s collapse earlier this month.
BlockFi, situated in New Jersey, claimed in a court document that it owed money to more than 100,000 creditors. It named FTX, a cryptocurrency exchange that is due $275 million on a loan from earlier this year, as its second-largest creditor.
The cryptocurrency lender stated it has “substantial exposure” to FTX and its connected firms and had already suspended withdrawals from its platform. The action was taken a few weeks after FTX’s founder Sam Bankman-Fried quit as CEO and the company sought bankruptcy protection in the United States.
After the cryptocurrency lender was impacted by a decline in pricing earlier in the year, it reached an agreement in July with FTX to provide the company with a $400 million revolving credit facility and an option to purchase it for up to $240 million.
