Crypto lender BlockFi bankrupt following FTX failure – Crypto lender BlockFi filed for bankruptcy protection on Monday, days after suspending withdrawals amid the fallout from the FTX exchange bankruptcy. BlockFi reportedly has around $257 million in cash. BlockFi executives estimate the company has over 100,000 creditors.

The company’s principal creditors are West Realm Shires Inc, trading name of FTX US, which has an unsecured claim of $275 million, and the Securities and Exchange Commission (SEC), which has an unsecured claim of $30 million. of dollars. The majority of the names of the other 50 main creditors have not been disclosed.

The company liquidated a large client at the start of the year, and needed a line of credit from FTX to survive at the start of the year. In announcing the suspension of withdrawals, BlockFi warned its customers not to deposit funds into its wallet or interest accounts.

The lender was expected to raise funds at a $1 billion valuation in June, having raised $350 million at a $3 billion valuation in March 2021. As recently as last July, the company was looking to s IPO with a potential fundraising of $500 million.

However, the company had to pay $100 million in February as part of a settlement with the SEC and several state regulators over allegations that its high-yield crypto lending product violated state and federal privacy laws. securities. As part of this deal, BlockFi also had to register its BlockFi Yield product with the SEC.

The company cut about a fifth of its workforce in June as the cryptocurrency market declined.

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