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  • By The Financial District

BlockFi Files For Bankruptcy As FTX Contagion Spreads

Crypto lender BlockFi filed for bankruptcy Monday (Tuesday, Nov. 29, 2022, in Manila), becoming the latest casualty of the financial contagion unleashed by the collapse of Sam Bankman-Fried’s empire, Allison Morrow and Matt Egan reported for CNN Business.


Photo Insert: BlockFi announced earlier this month that it had halted withdrawals, citing “significant exposure” to Bankman-Fried’s FTX exchange, as well as its sister hedge fund Alameda.



BlockFi announced earlier this month that it had halted withdrawals, citing “significant exposure” to Bankman-Fried’s FTX exchange, as well as its sister hedge fund Alameda. FTX, Alameda and dozens of affiliates filed for bankruptcy on November 11.


“Since the pause, our team has explored every strategic option and alternative available to us, and has remained laser-focused on our primary objective of doing the best we can for our clients,” the company said in a statement.



Shortly after filing for Chapter 11, BlockFi filed a lawsuit against Bankman-Fried’s Emergent Fidelity Technologies vehicle, demanding he turn over collateral that BlockFi claims it is owed.


That collateral, according to the Financial Times, is Bankman-Fried’s 7.6% stake in online trading app Robinhood. The privately held firm, founded in 2017 by Zac Prince and Flori Marquez, made loans to customers using crypto assets as collateral.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

In its bankruptcy filing, BlockFi said it owed money to more than 100,000 creditors. The largest creditor listed is Ankura Trust, a company that represents creditors in stressed situations, which is owed $729 million.


FTX, BlockFi’s second-largest creditor, is owed $275 million. BlockFi has about $257 million in cash on hand, and the company expects that will provide sufficient liquidity to support it during restructuring.


The company estimates it has between $1 billion and $10 billion in assets and liabilities, according to the filing.



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