Crypto Lender BlockFi Prepares To Go Belly Up Amid FTX Bankruptcy

Bitcoinist

BlockFi, a cryptocurrency platform offering multiple financial products like low-interest loans and a crypto rewards credit card, could become the latest casualty following the FTX collapse that continues to hurt the entire cryptocurrency market.

Although the company initially denied having most of its assets in the cryptocurrency exchange, management has now admitted having significant exposure to FTX, Forkast News reported, citing The Wall Street Journal.

How To Get Free Crypto  
Win an all-expenses-paid VIP trip to the FIFA World Cup and $30,000 in exclusive prizes with Punt Casino – the Road to Qatar awaits!
5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Furthermore, BlockFi also acknowledged having an undrawn line of credit and substantial obligations with FTX.

This happened after the Sam Bankman-Fried-owned firm provided timely assist for the lending company in July this year via a $400 million revolving credit facility and an option for a buyout for $240 million.

BlockFi Prepares To Go Belly Up

Last Friday, citing lack of clarity about the circumstances involving the Bahamas-based crypto exchange and its trading arm, the Alameda Research, BlockFi announced via Twitter that it was halting customer transactions.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?

The matter took a turn for the worse, as some people familiar with the situation were cited by the Journal for reports that the company is indeed planning to lay off some of its workers in preparation for a Chapter 11 Bankruptcy filing.

Under this chapter of the U.S. Bankruptcy Code, a debtor usually proposes plans for reorganization to keep a business alive and pay creditors over time.

Coinbase Banner  

Image: TheNewsCrypto

As further details about the sudden collapse of FTX arise, more investors are revealed to have been greatly affected by this unforeseen and unfortunate development.

For example, Japanese investment conglomerate SoftBank, which incidentally is one of the companies that backed the crypto exchange platform during its fundraising campaign, is now forced to mark its $100 million investment to the company as zero, effectively losing that large sum of money.

Meanwhile, the Solana blockchain and its native token SOL lost almost 60% of market value following the FTX implosion. There are also reports that investors and app developers are already abandoning the blockchain ecosystem in the wake of fears of potential greater loses.

FTX Trying To Salvage Itself – Can It?

FTX moved to file for bankruptcy last Friday and the details it provided were alarming and the cause of growing fears among participants of the crypto market.

FreeBitcoin Banner  

The crypto exchange reported a severe liquidity crisis in its filing and revealed there could be 1 million creditors affected by its collapse.

In a related matter, there are reports that SBF and some of the remaining employees of FTX spent their weekend calling and looking for potential and willing investors in an attempt to raise $8 billion. These, however, were unsuccessful.

Meanwhile, with BlockFi’s decision to file for bankruptcy, analysts anticipate the broader crypto market will experience yet another beating while the fallout from the FTX disaster still pervades.

Crypto total market cap at $803 billion on the daily chart | Featured image from DeviantArt, Chart: TradingView.com

Go to Source
Author: Christian Encila


Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

This site uses Akismet to reduce spam. Learn how your comment data is processed.