Crypto loan blockfi reports bankruptcy according to Chapter 11

Blockfi has registered bankruptcy according to Chapter 11, which means that the crypto loan, who is supported by Peter Thiel's venture company, is the latest victim of the consequences of the collapse of the FTX exchange by Sam Bankman-Fried.

Blockfi was saved by Bankman-Fried this summer after suffering losses in loans to the collapsed hedge fund Three Arrows Capital. After the collapse of FTX, Blockfi paused lending and customer withdrawals and fueled speculation about whether it could survive.

The lender had assets and liabilities of $ 1 to $ 10 billion with more than 100,000 creditors, as can be seen from bankruptcy applications at the Federal Court in New Jersey on Monday.

Blockfi is the youngest once-flying crypto company that falls onto the earth, while the collapse of Banksman-Fried's crypto empire, which also includes his retail company Alameda Research, continues to send shock waves through the digital assets industry.

"Due to the recent collapse of FTX and the subsequent insolvency proceedings, which continues, the company expects the recovery of FTX to be delayed," said Blockfi on Monday.

The company based in New Jersey under the direction of CEO ZAC Prince was rated $ 4 billion in a fundraising round last summer. According to the documents, the company has 19 percent in the possession of Valar Ventures, a risk capital company based in New York, which is supported by Thiel.

After Blockfi suffered losses from the crypto crash this spring, Blockfi completed a contract with FTX in July, which included a revolving credit facility of FTX US in the amount of USD $ 400 million and an option for the stock exchange for the purchase of Blockfi at a "variable price". . . Based on performance triggers ”.

Blockfi is one of the largest crypto players who stalled after FTX filed for bankruptcy at the beginning of this month. FTX and Alameda Research had loans from many of the largest companies in the cryptom market and considered assets for customers who acted on the platform, which fueled the fears of further infection in the industry.

At the beginning of this month, Blockfi said that "a significant commitment to FTX and affiliated companies that includes obligations that owes Alameda us, assets that are kept at FTX.com and not used from our credit line with ftx.us".

Blockfi listed FTX US as his second largest creditor in bankruptcy applications and owed the American branch of Bankman-Frieds company $ 275 million.

his greatest creditor is Ankara Trust, a trustee based in New Hampshire who managed a contract on behalf of Blockfi. The lender owes these creditors $ 729 million.

Blockfi owes the US Securities and Exchange Commission $ 30 million as part of a comparison of $ 100 million agreed with the supervisory authority in February, in which the lender was burdened to bid other accounts without registering them as securities.

Blockfi said it has $ 257 million cash available to continue certain operations during the bankruptcy proceedings.