Crypto lender BlockFi heading for bankruptcy amid FTX collapse

The news that BlockFi is mulling a bankruptcy filing comes a day after the crypto lender denied allegations that most of its assets were held on FTX.

Crypto lender BlockFi heading for bankruptcy amid FTX collapse

Wednesday November 16, 2022,

2 min Read

Crypto lending platform BlockFi is expected to file for bankruptcy as reported by multiple media outlets. As per a Wall Street Journal article, the crypto lender is also preparing for lay-offs.

Earlier, BlockFi denied rumours of holding majority of assets on FTX, and Flori Marquez, Founder and Chief Operating Officer, had assured that despite having $400 million credit in line with FTX US, BlockFi remained an independent entity.

However, BlockFi did not respond to a request for a comment about its bankruptcy filing.

Recent developments

Last week, the industry witnessed the collapse of crypto exchange FTX, which was once valued at $32 billion. The fall of the third largest crypto exchange in the world came as a shock to many, as the exchange handled transactions worth $1 billion daily.

Following that , on November 11, BlockFi announced it was pausing client withdrawals due to lack of clarity around the status of crypto exchange FTX.

On November 14, the firm took to Twitter to announce that it was looking to achieve the best possible outcome.

Despite lending money and bailing out companies, recent revelations about FTX's liquidity crisis have put the company in trouble and it is now subject of state and federal investigations.

Edited by Teja Lele