With crypto’s house of cards coming down fast in the wake of the massive fraud perpetrated at FTX, crypto lender BlockFi is the latest to file for bankruptcy.
For those keeping track of these things, you can add BlockFi’s name to FTX, Vauld, Genesis Block, Liquid Global, Voyager Digital, Celsius, and others buried six feet under in crypto’s digital graveyard.
It’s a domino effect of bankruptcy all around. After being stung by the bankruptcy of Three Arrows Capital, one of its largest borrowers, BlockFi cut staff and was looking forward to a a <$400 million lifeline from FTX. But after FTX’s meltdown, BlockFi was forced to halt customer withdrawals and subsequently filed for bankruptcy itself.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” wrote Mark Renzi of Berkeley Research Group, BlockFi’s financial advisor, in a press release announcing the lender’s own Chapter 11 bankruptcy, which was filed Nov. 28 in New Jersey. While BlockFi owes money to FTX, those “recoveries…will be delayed” due to FTX’s own bankruptcy, he added.