BlockFi explained

BlockFi
Logo Alt:BlockFi's logo, a wordmark with a rotated blue square icon
Location:Jersey City, New Jersey, U.S.
Industry:Cryptocurrency
Fate:Filed for Chapter 11 bankruptcy protection in November 2022

BlockFi was a digital asset lender founded by Zac Prince and Flori Marquez in 2017.[1] It was based in Jersey City, New Jersey.[2] [3] It was once valued at $3 billion.[4]

In July 2022, it was announced that the cryptocurrency exchange FTX made a deal with an option to buy BlockFi for up to $240 million. The deal included a $400 million credit facility for the company.[5] [6]

In November 2022, after the declaration of bankruptcy by FTX, the company halted withdrawals on its platform.[7] The firm disclosed "significant exposure" to FTX on November 14. The next day, the Wall Street Journal reported that BlockFi would likely file for bankruptcy, which was reaffirmed by reports compiled by Bloomberg News.[8] [9] [10] On November 28, BlockFi confirmed the reports and officially filed for Chapter 11 bankruptcy protection[11] with more than 100,000 creditors, according to filings.[12] [13] In March 2023, following the collapse of Silicon Valley Bank, the U.S. Trustee watchdog overseeing BlockFi's bankruptcy revealed that BlockFi had around $227 million in uninsured funds at the bank.[14] BlockFi's CEO Zac Prince testified in the trial of Sam Bankman-Fried, and stated that he thought BlockFi would not have gone bankrupt if it had not lost access to its funds in the FTX collapse.[15] In October 2023, BlockFi emerged from Chapter 11 bankruptcy and announced that it would begin winding down all of its remaining operations and assets post-bankruptcy. Over the next few months, crypto assets will be returned to customers at BlockFi until all assets are fully liquidated. BlockFi will continue to pursue payments from the bankruptcies of FTX and Three Arrows Capital during the liquidation process.[16]

Notes and References

  1. News: Leising . Matthew . 2022-03-04 . Crypto Lender's Wall Street Ascent Is Born of Wife's Frustration . . limited . https://archive.today/20210323140200/https://www.bloomberg.com/news/articles/2021-03-04/crypto-lender-s-wall-street-ascent-is-born-of-wife-s-frustration . 2021-03-23 . live.
  2. News: 2022-02-14 . BlockFi, a crypto firm, reaches a $100 million settlement for failing to register loan products . The New York Times . 2022-11-15.
  3. News: 2021-09-05 . Crypto's Rapid Move Into Banking Elicits Alarm in Washington . The New York Times . 2022-11-15.
  4. Web site: Crypto Lender BlockFi Suspends Withdrawals in FTX Contagion. finance.yahoo.com.
  5. 2022-11-16.
  6. Web site: FTX signs a deal giving it the option to buy crypto lender BlockFi. Kate. Rooney. July 1, 2022. CNBC.
  7. 2022-11-16.
  8. News: Crypto lender BlockFi says it has significant exposure to FTX . 15 November 2022 . Reuters . 14 November 2022.
  9. 2022-11-16.
  10. Web site: Massa . Annie . Butt . Rachel . November 16, 2022 . Crypto Lender BlockFi Plans Bankruptcy Filing Within Days in FTX Fallout . 2022-11-17 . Bloomberg . Bloomberg News.
  11. Web site: 2022-11-29 . Crypto lender BlockFi files for bankruptcy, seeking chapter 11 protection . 2022-12-13 . en-US.
  12. Web site: BlockFi files for bankruptcy as FTX fallout spreads. CNBC. 2022-11-28. 2022-11-28.
  13. Web site: Crypto lender BlockFi files for bankruptcy in New Jersey . . 28 November 2022.
  14. News: Yerak . Becky . March 10, 2023 . Bankrupt BlockFi Has $227 Million in Unprotected Funds at Silicon Valley Bank . . subscription . https://archive.today/20230311084034/https://www.wsj.com/amp/articles/bankrupt-blockfi-has-227-million-in-unprotected-funds-at-silicon-valley-bank-8446c4c8 . March 11, 2023 . live.
  15. News: Nicolle . Emily . March 10, 2023 . After Ellison, Crypto Takes Center Stage at Bankman-Fried Trial BlockFi CEO Zac Prince zeroes in on loans to Alameda . Bloomberg . subscription .
  16. Web site: Crypto lender BlockFi emerges bankruptcy. October 24, 2023. October 25, 2023. Reuters. en.

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