Distressed crypto firm BlockFi has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey following the implosion of putative acquirer FTX.
In the filing, the company indicated that it had more than 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.
The crypto company, which offers a trading exchange and interest-bearing custodial service for cryptocurrencies,was one of many firms to face serious liquidity issues after the implosion of Three Arrows Capital.
The company suspended withdrawals earlier this month during a “pause.” At the time, the company told
BlockFi was one of the first firms to be “rescued” by former billionaire Sam Bankman-Fried’s FTX in a deal initially reported as being worth up to $240 million.
The deal, which consisted of a $250 million credit line with an option to purchase, saved BlockFi from declaring bankruptcy at the time. CNBC later reported the actual value of the deal as ranging from $25 to $50 million.
In filing bankruptcy, BlockFi joins the ranks of Voyager Digital and Celsius Networks, both of which filed for Chapter 11 bankruptcy after the TerraLuna crisis in early 2022.
BlockFi attorneys had already filed a notice of appearance weeks earlier in the United States Bankruptcy Court for the District of Delaware in FTX’s bankruptcy case.
The company had already halted withdrawals after Sam Bankman-Fried’s FTX empire unraveled in a matter of days.
BlockFi did not immediately respond to a request for comment.
This is a developing story.