NewsBytes
    Hindi
    More
    In the news
    Mukesh Ambani
    WhatsApp
    Reliance Jio
    OPPO
    Vivo
    Sensex
    Bitcoin
    NewsBytes
    Hindi
    NewsBytes
    User Placeholder

    Hi,

    Logout


    India Business World Politics Sports Technology Entertainment Auto Lifestyle Inspirational Career Bengaluru Delhi Mumbai Visual Stories Find Cricket Statistics Phones Reviews Fitness Bands Reviews Speakers Reviews

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
     
    Home / News / Business News / After FTX implosion, crypto lender BlockFi files for bankruptcy
    Business

    After FTX implosion, crypto lender BlockFi files for bankruptcy

    After FTX implosion, crypto lender BlockFi files for bankruptcy
    Written by Athik Saleh
    Nov 29, 2022, 02:01 pm 2 min read
    After FTX implosion, crypto lender BlockFi files for bankruptcy
    FTX agreed to rescue BlockFi earlier this year (Photo credit: BlockFi)

    The aftermath of FTX's implosion is still being felt across the crypto world. BlockFi, a cryptocurrency lender, has now become the latest casualty of the events that brought FTX down. The lender has filed for bankruptcy in the US, citing "significant" exposure to FTX. FTX and its hedge fund sibling Alameda Research declared bankruptcy earlier this month.

    Why does this story matter?

    • Crypto lenders like BlockFi are the de facto banks of the crypto world. They went through a boom during the pandemic.
    • However, unlike traditional lenders, they are not bound to hold capital or liquidity buffers. Although this was seen as an advantage, the FTX crash has proved otherwise.
    • BlockFi's downfall is another example of how much we need some basic regulation in the industry.

    BlockFi owes money to over 100,000 creditors

    BlockFi has filed for bankruptcy in the US, seeking protection to restructure, settle its debts, and recover money for investors. The company suspended withdrawals earlier this month after the collapse of FTX. In its filing, the company said that it owes money to over 100,000 creditors. It believes that the Chapter 11 bankruptcy filing will help it develop a reorganization plan that helps all.

    FTX and BlockFi signed an agreement earlier this year

    Earlier this year, along with the rest of the crypto market, BlockFi was also reeling in the post-pandemic world. This is when FTX stepped in to help the firm. In July, they signed a deal that gave BlockFi $400 million in revolving credit from FTX. Under the agreement, FTX had the option to buy BlockFi for up to $240 million.

    BlockFi's exposure is from loans to Alameda

    In its bankruptcy filing, BlockFi said that its substantial exposure to FTX created a liquidity crisis. However, it said, it isn't facing all the issues that FTX is facing. The firm attributed its liquidity crisis to exposure to FTX through loans to Alameda Research, a trading firm affiliated with FTX, and cryptocurrencies held in FTX that are now trapped there.

    BlockFi plans to layoff two-thirds of its employees

    New Jersey-based BlockFi estimates its assets and liabilities to be between $1-$10 billion. It has already sold a portion of its assets to fund bankruptcy, and now has $256.5 million in cash. In the filing, it has listed FTX as its second-largest creditor. Ankura Trust is the largest creditor. In a different filing, BlockFi said that it will ax two-thirds of its 292 employees.

    Share this timeline
    Facebook
    Whatsapp
    Twitter
    Linkedin
    Latest
    Cryptocurrency
    Finance

    Latest

    Spinach offers these 5 fantastic health benefits Healthy Foods
    Five Friday motivation tips to finish the week strong Workplace
    Happy birthday, Evan Peters! Iconic roles of 'Dahmer' actor Hollywood
    Google upgrades end-to-end encryption for groups chats on Messages Google

    Cryptocurrency

    Cryptocurrency prices: Today's rates of Bitcoin, Ethereum, Solana, Shiba Inu Bitcoin
    FTX collapse: Cryptocurrency worth $415 million stolen by hackers Binance USD
    Today's cryptocurrency prices: Rates of Bitcoin, Ethereum, Shiba Inu, Tether Bitcoin
    Cryptocurrency prices: Check today's rates of Bitcoin, Ethereum, Solana, Tether Bitcoin

    Finance

    Adani Enterprises files papers for India's largest FPO: Key facts Adani Group
    Gross NPAs of Indian banks fall to 7-year low: RBI Reserve Bank Of India (RBI)
    IIT Madras launches dual degree programme on Quantitative Finance Education
    Electoral bond sales begin in India: How to buy them? State Bank of India (SBI)

    Love Business News?

    Subscribe to stay updated.

    Business Thumbnail
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2023