The next in line is giving up in the Crypto Contagion. The crypto lender BlockFi is the latest victim of contagion within the industry following the collapse of the crypto exchange FTX. The company and eight of its affiliates filed for Chapter 11 bankruptcy. According to the filing, BlockFi has over 100,000 estimated creditors and up to $10 billion in liabilities. The filing says that the firm has $256.9 million cash in hand.
In its press release, the company said that it will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities. Platform activity continues to be paused. BlockFi has US$256.9 million in cash on hand, which is expected to provide sufficient liquidity to support certain operations during the restructuring process.
BlockFi International Ltd, a company registered in Bermuda, filed a petition with the Supreme Court of Bermuda for the appointment of joint provisional liquidators pursuant to section 161(e) of Bermuda’s Companies Act, 1981 in the near term. BlockFi currently anticipates that client claims will be addressed through the Chapter 11 process.
Haynes and Boone LLP, Kirkland & Ellis LLP, and Cole Schotz P.C. are serving as legal counsel, Moelis & Company is serving as investment banker, and Berkeley Research Group is serving as financial advisor to the Company. C Street Advisory Group, LLC is serving as strategic restructuring and communications advisor to the Company.
