Crypto lender BlockFi reportedly set to file for bankruptcy after FTX victim


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Investing.com – Crypto lending platform BlockFi, which has been largely undermined by the bankruptcy of FTX, is reportedly considering filing itself for Chapter 11 bankruptcy protection and bracing for layoffs jobs, a company source told The Wall Street Journal.

The WSJ also revealed that BlockFi has also had discussions with Binance about possible financial assistance.

Recall that BlockFi paused client withdrawals last Thursday evening, and reaffirmed on Monday that it would keep withdrawals paused and limit activity, acknowledging that it had “significant exposure to FTX” which limited its ability to operate normally.

“Rumours that a majority of BlockFi’s assets are held at FTX are false,” BlockFi wrote to clients on Monday. “That said, we have significant exposure to FTX and related corporate entities which includes obligations owed to us by Alameda, assets held on FTX.com, and undrawn amounts from our line of credit with FTX US.”

Indeed, BlockFi accepted a $400 million line of credit from FTX US over the summer, having faced difficulties when the cryptocurrency market crashed following the disappearance of LUNA. and TerraUSD.

At a town hall meeting on Monday, BlockFi employees were warned of the seriousness of the situation, although the layoffs were not explicitly mentioned, the WSJ source said.

Near the end of Monday’s email to clients, the company mentioned that it had “engaged expert external advisors” to help “manage BlockFi’s next steps.”

Finally, on the cryptocurrency market, it should be noted that this information has so far not caused too much of a stir, with the currently showing at $16,800, more or less stable over one day.



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