BlockFi is preparing to file for a chapter 11 bankruptcy and axing up jobs. They have already halted withdrawals and deposits for customers.
BlockFi hasn’t confirmed the bankruptcy filing, however a wsj report has confirmed that FTX downfall has brought BlockFi in an adverse situation. BlockFi is also in talks with Binance for financial help.
BlockFi halted customers withdrawals last Thursday following the FTX crash. On this Monday BlockFi dismissed any rumors that majority of BlockFi assets are custodied at FTX.
BlockFi acknowledged that they do have significant exposure to FTX and associated corporate entities that encompasses obligations owed to them by Alameda, assets held at FTX.com, and undrawn amounts from their credit line with FTX.US.
Over the summer, BlockFi accepted a $400 million credit line from FTX US. BlockFi secured the credit line after experiencing its own difficulties when the cryptocurrency market collapsed as a result of Terra’s LUNA crash and UST de-peg.
BlockFi also stated that it has the necessary liquidity to explore all options and they have engaged expert outside advisors that are helping them to navigate BlockFi’s next steps. Haynes and Boone continues to serve as primary outside counsel, and BRG has been engaged as BlockFi’s financial advisor.
Also Read: Why is FTX’s FTT Token crashing down?
