BlockFi will file for Chapter 11 bankruptcy with $10 billion in estimated assets and liabilities
The crypto lender platform BlockFi has filed for Chapter 11 bankruptcy protection, becoming the latest domino to fall during the ongoing cryptocurrency crisis, the company is also laying off a large portion of its staff, according to the announcement today.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” said Mark Renzi of Berkeley Research Group, the Company’s financial advisor. “From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”
BlockFi paused customer withdrawals on November 11, 4 days later, the platform reaffirmed that it would keep withdrawals paused and limit activity, acknowledging that it had “significant exposure to FTX” that limited its ability to operate as usual.
BlockFi says that it has $256.9 million in cash on hand, which is expected to provide sufficient liquidity to support certain operations during the restructuring process. The infamous crypto lender has up to $10 billion in estimated assets and liabilities.
Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganization” bankruptcy. Chapter 11 bankruptcy is the most complex of all bankruptcy cases. It is also usually the most expensive form of a bankruptcy proceeding. For these reasons, a company must consider Chapter 11 reorganization only after careful analysis and exploration of all other possible alternatives. During a Chapter 11 proceeding, the court will help a business restructure its debts and obligations. In most cases, the firm remains open and operating.
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