BlockFi declares bankruptcy, files Chapter 11

Summary:

• Crypto lender BlockFi declared bankruptcy on Monday after exposure to FTX.
• The company had some 100,000 creditors and around $256 million in cash when chapter 11 was filed.
• FTX backed the lender with a $250 million loan following Three Arrows Capital exposure.

Cryptocurrency lender BlockFi filed for chapter 11 bankruptcy on Monday following exposure to troubled crypto exchange FTX, the exchange founded by Sam Bankman-Fried. 

BlockFi held $256.9 million in cash when it filed for bankruptcy. The company also has around $1 billion in assets and liabilities alike. Per details of the filing, the lender boasts over 100,000 creditors including FTX US and the Securities and Exchange (SEC). 

The crypto lender reported $275 million in unsecured claims tied to FTX US. Notably, Sam Bankman-Fried’s exchange loaned $250 million to BlockFi back in June. At the time, BlockFi faced liquidity concerns after exposure to insolvent crypto hedge fund Three Arrows Capital (3AC).

Also, the lender owes $30 million to the SEC as part of a settlement agreement from February 2022. The largest creditor was Ankura Trust Company LLC with a $729 million claim. The crypto lender joined other centralized crypto entities like 3AC, Celsius, FTX, and Voyager in bankruptcy.