BlockFi Reportedly Prepares for Possible Bankruptcy
- The Wall Street Journal cited unnamed sourced, who said the exchange was preparing to lay off some of its employees, and is mulling over a potential bankruptcy filing.
- Earlier this week, the crypto lender revealed that it had a “significant exposure” to FTX, but denied that the majority of its assets were held on the collapsing exchange.
BlockFi CEO Zac Prince. CoinDesk
Cryptocurrency lending firm BlockFi could soon file for Chapter 11 bankruptcy protection following the collapse of more than 100 companies connected to FTX, the Wall Street Journal reported on 15 November.
The publication cited “people familiar with the matter”, who said the company was preparing to lay off some of its employees and mulling over a potential bankruptcy filing due to “significant exposure to already bankrupt exchange FTX. The crypto lending platform had originally suspended withdrawals last week due to the “lack of clarity on the status of FTX.com, FTX US and Alameda” which prevented it to operate as normal.
Back on 8 November, BlockFi’s founder and COO Flori Marquez assured users that the company’s products were “fully operational” as it had secured a $400 million line of credit from FTX.US, which was yet to be affected by the collapse of FTX. This Monday the company admitted in a blog post it had a “significant exposure to FTX”, obligations owed to it from Alameda, and an undrawn amount from its credit line with FTX.US. These assets, however, will take some time to recover as all of these entities are going through a bankruptcy process.
The fallout from the collapse of numerous companies connected to FTX continues to impact various crypto companies. Yesterday, Japanese crypto exchange Liquid disabled fiat and crypto withdrawals for its customers in order to comply with regulations connected to FTX’s bankruptcy filing. On the same day, crypto lending platform SALT also paused withdrawals and deposits to its platform as the “collapse of FTX has impacted our business”, though the CEO of the firm clarified that this was not a “notice of going bust”.
- The New York Jurors took 4 fours of deliberating before pronouncing the former FTX CEO guilty of all seven charges of fraud and conspiracy to commit fraud.
- Bankman-Fried will now have to appear in court on 28 March, 2024, where he will face a potential maximum sentence of 115 years in prison.
Former CEO of FTX Sam Bankman-Fried leaves the Federal Court in New York after pleading not guilty, 3 January, 2022.
lev radin/Shutterstock
- A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
- The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
- Joseph Pimbley, a member of litigation consulting firm PF2 Securities, will try to rebuff testimonies from Caroline Ellison, Gary Wang, Nishad Singh, and Adam Yedidia.
- During his testimony Pimbley will try to establish a timeline for the FTX-Alameda line of credit, and convince the jury it fluctuated between $1 billion and $3 billion between 2021 and 2022.