By Nathan Ferguson
According to the latest information gathered from sources, popular crypto organization BlockFi has now registered for bankruptcy.
The crypto market has taken yet another hit, as crypto organization BlockFi has announced that it has reached the state of bankruptcy, following the recent demise of the FTX cryptocurrency exchange.
Working to Recover
BlockFi has given an official statement regarding the matter, stating that they are moving forward with utilizing the Chapter 11 strategy in order to recuperate the responsibilities that are owed to the company through its associates, which also includes the FTX exchange. The Chapter 11 strategy helps companies to continue functioning so that they can figure out how they can give back to the creditors.
BlockFi also mentioned that the recovery process will take quite some time due to the effects of FTX going down. According to the filing from FTX, registered in the city of New Jersey USA, the valuation of each of BlockFi’s property in terms of assets and other functions ranges from around $1 Billion to $10 Billion and they have a current cash holding of nearly $250 million.
Following the Chapter 11 strategy, BlockFi said that they are working to bring down any unwanted costs to handle the matter.
Internal Issues
The company had also reportedly paused withdrawals some time ago, mentioning that the situation with FTX was unclear, so they are looking at every alternative and advise provided to them. This was reported about a month ago by Bloomberg in which it was highlighted that BlockFi has been having issues with clarity over the origins of a transfer on a credit path from FTX and collateral over lending towards Alameda.
BlockFi was also reported to have been transferring a portion of their property on the FTX exchange, however a major part of their property was still with them during the demise of FTX.
BlockFi had been in close contact with FTX, because it had apparently lost a massive $80 million due to a loan taken by a cryptocurrency hedge fund named Three Arrows Capital, that fell because of the effects of the UST de-pegging event that happened back in the month of May.
BlockFi has also had issues with regulatory bodies such as the United States Securities and Exchange Commission (SEC), mainly because of its interest related accounts and was charged with around $100 million in fines back in February from which $30 million is still yet to be submitted.