BlockFi Declares Bankruptcy

According to the latest available information, the bitcoin lending platform known as BlockFi intends to file for Chapter 11 bankruptcy on November 28th, 2018. This was written about by Decrypt, and in their story, they gave a link to the source where they got their information.

BlockFi and Eight of its Subsidiaries have Filed for Bankruptcy in the District of New Jersey

The Bermuda-based company BlockFi International Ltd. has asked the Supreme Court to appoint interim liquidators in case the company can’t pay its debts. BlockFi plans to come up with a plan to keep key employees so that there will always be enough resources for important business activities.

According to more information given by BlockFi, “the company also started today an internal effort to cut spending, including labor costs, by a large amount.” “The main goal of the plan is to find and get rid of any spending that isn’t necessary.”

The platform claims that it has a current cash position of $256.9 million, which “will provide ample liquidity to support various actions in the restructuring process.”

In the papers that BlockFi has turned in, it says that the company owes more than $100,000 to its creditors. It is estimated that the sum of the corporation’s assets and liabilities is between one and ten billion dollars.

Ankura Trust Company, LLC, is due around $729 million; West Realm Shires, Inc., is owed approximately $275 million; and the United States Securities and Exchange Commission is owed approximately $30 million. These are the most important debts. The identities of the people who are still alive are a closely guarded secret.

BlockFi Plans & Prospects

The revelation that all of the company’s commodities are “fully operational” was made on November 8 by Flory Marquez, the founder of the platform. He also stated that the operation of the company is independent of the Sam Bankman-Freed exchange.

On the other hand, BlockFi stated on November 11 that it would be unable to continue conducting business as usual and that it would instead restrict operations because there was a lack of clarity surrounding the position of FTX and Alameda Research. BlockFi stated this because there was a lack of information regarding the relationship between FTX and Alameda Research.

At this moment, the website is unable to process withdrawals, and users have been requested to delay making deposits until the problem has been resolved. On the same day that Bankman-Fried resigned as CEO of the firm, the FTX Group lodged its petition for bankruptcy protection under the Bankruptcy and Consumer Protection Act.

On November 14, the corporation challenged the idea that the vast bulk of BlockFi’s assets are stored on FTX. Nevertheless, the company acknowledged that the system was behind on its commitments to Alameda Research and also had a credit line that had been extended by the American subsidiary of the exchange.

You may recall that on November 16, sources for The Wall Street Journal disclosed that BlockFi is getting ready to petition for bankruptcy protection. If so, you may also recall that this information was made public.