According to information published by the New York Times, given the insolvency situation that the company is facing after what happened with FTX, its managers explored all possible options but unfortunately they could not overcome the situation against. Consequently, this Monday, November 28, they chose to declare bankruptcy before the US authorities, this in accordance with the provisions of chapter 11 of the corresponding legislation.
In this regard, the BlockFi team published an official statement today confirming that they are in the process of bankruptcy and disseminated it through their official channels.
“BlockFi Inc. and eight of its affiliates (“BlockFi” or “the Company”) today commenced voluntary cases under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of New Jersey (“ the court”) to stabilize its business and provide the Company with the opportunity to consummate a comprehensive restructuring transaction that maximizes value for all customers and other stakeholders,” the letter begins.
“As part of its restructuring efforts, the Company will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities (“FTX”). Due to the recent collapse of FTX and its consequent process of bankruptcy, which is still ongoing, the Company expects FTX’s recoveries to be delayed.”
FTX crash affected BlockFi
FTX had provided a $400 million credit line to support BlockFi. Added to this is the possible purchase option for another $280 million from the exchange founded by Sam Bankman-Fried.
Regarding the fall of FTX and what it meant for BlockFi, the company’s financial advisor, Mark Renzi, indicated: “with the collapse of FTX, the management team and the board of directors of BlockFi took immediate measures to protect customers and the Company. Since inception, BlockFi has worked to positively shape the cryptocurrency industry and move the sector forward. BlockFi expects a transparent process that achieves the best outcome for all customers and other stakeholders.”
BlockFi currently reported having available liquidity of US$256.9 million, which it expects to use to support what the restructuring process implies after the bankruptcy declaration.
Source: Ambito
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