NJ Cryptocurrency Firm BlockFi Files for Chapter 11 Bankruptcy
A New Jersey-based cryptocurrency firm has become the latest to file for Chapter 11 bankruptcy.
BlockFi, which was founded in 2017, listed more than 100,000 creditors with liabilities and assets ranging from $1 billion to $10 billion, according to a filing in U.S. Bankruptcy Court for the District of New Jersey.
The same filing, as reported by CNBC, showed that the Jersey City-based company’s largest disclosed client has a balance of nearly $28 million.
A subsidiary based in Bermuda also filed a similar petition with the Supreme Court of Bermuda, with the anticipation that client claims would also be addressed through the Chapter 11 process.
BlockFi had already halted withdrawals of customer deposits following “the shocking events” surrounding the recent collapse of FTX.
Months earlier, FTX extended a $400 million revolving credit facility to BlockFi in July, the same CNBC report said, following massive losses on loans to "collapsed crypto hedge fund Three Arrows Capital," according to Financial Times.
Bitcoin, among the most widely traded cryptocurrencies, has plunged almost 70% in 2022 to below $16,000 apiece, as reported by the Associated Press.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” Mark Renzi of Berkeley Research Group, the company’s financial advisor said in a written statement.
“BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders,” he said.