BlockFi has filed for bankruptcy and reorganization, with more than 100,000 creditors [Updated on November 30]

22-11-29 11:23

Read this article in 10 Minutes

AI summary

View the summary

Cryptocurrency lending firm BlockFi Inc , which is financially intertwined with FTX, filed for bankruptcy on Nov. 28, becoming the latest major digital asset firm to collapse since FTX. The company's top 10 creditors alone are owed nearly $1.2 billion, and the total amount could be much larger, according to the company's filings with U.S. Bankruptcy Court in Trenton, New Jersey.

BlockBeats will continue to track events and bring readers the latest news

BlockFi filed for bankruptcy and filed a lawsuit against SBF

Progress of events on November 29

Foreign media: BlockFi has filed for bankruptcy Restructuring, still holding $256.9 million in cash"

November 28, 2022, crypto lending company BlockFi and its eight The subsidiary has filed for bankruptcy reorganization in New Jersey bankruptcy court. BlockFi will focus on recovering all debt owed to BlockFi by its counterparties, including FTX and related corporate entities. BlockFi currently holds $256.9 million in cash and platform services will remain suspended.

"BlockFi has more than 100,000 creditors, and its assets and liabilities are between US$1 billion and US$10 billion"

According to BlockFi The filing for bankruptcy and reorganization shows that its creditors exceed 100,000, and both its assets and liabilities are between 1 billion and 10 billion US dollars. On the liability side, the largest creditor, Ankura Trust Company, owed $729,036,246, the second largest creditor, FTX US, was owed $275 million, and the fourth largest creditor, the US Securities and Exchange Commission (SEC), was owed a fine of $30 million. The total liability to the top 50 creditors is about $1.3 billion. BlockFi currently holds only $256.9 million in cash, and platform services are still suspended.

"BlockFi sues SBF: Alameda defaulted on $680 million in loans and ultimately made it insolvent"

A few hours after filing for bankruptcy, BlockFi filed a lawsuit against former FTX CEO SBF, demanding the confiscation of SBF's $575 million worth of stock in Robinhood.

BlockFi’s exposure to SBF ultimately led to its downfall, court documents show Nominal security for an unnamed borrower with equity assets on Robinhood as collateral. Legal documents show that the "unnamed borrower" is Alameda Research, which owed BlockFi $680 million in early November. Furthermore, BlockFi also named ED&F Man Capital Markets as Emergent's broker in the lawsuit, claiming that the brokerage firm "refused to transfer collateral to BlockFi."

"Bloomberg: BlockFi is cutting costs for its bankruptcy restructuring and will lay off nearly 70% of its employees"

BlockFi in a statement It said it sold its stake to pay for bankruptcy and does not plan to finance itself with loans while it remains under court protection. BlockFi is currently cutting costs for its bankruptcy reorganization plan, has issued layoff notices to nearly 250 employees (out of a total of approximately 370 employees).

"WSJ: Valar Ventures, a venture capital backed by Peter Thiel, holds 19% of BlockFi's shares" Venture capital firm Valar Ventures, a venture capital firm spun out of Thiel Capital, the investment firm founded by top investor Peter Thiel, owns a 19% stake in crypto lending firm BlockFi, making Valar one of BlockFi's largest shareholders.

Suspended from BlockFi After the withdrawal, a total of nearly 28,000 ETHs were transferred to Gemini"

Since BlockFi suspended user withdrawals on November 11, 2022, a total of 27,806 ETHs were transferred (about 33 million US dollars) to Gemini, and about 3.8 million US dollars worth of Stablecoin to the address starting with 0x22ff.

Progress of events on November 30th

< br>

BlockFi has commenced filing against SBF Holdings Emergent Fidelity Technologies Legal action seeking repossession of collateral. The lawsuit stated that Emergent Fidelity, as the escrow agent under the pledge agreement, escrowed the collateral belonging to BlockFi, and Emergent failed to fulfill its obligations under the pledge agreement to deliver the collateral to BlockFi in a timely manner.

At the same time, BlockFi's lawyers stated in bankruptcy court that BlockFi's digital assets worth $355 million are currently frozen in FTX. The amount does not include a $671 million outstanding loan to Alameda Research.

《 Crypto lawyer says BlockFi most likely to pay SEC first"

BlockFi failed to register its crypto loan product in February The offering resulted in a $50 million settlement with the SEC. It also agreed to pay an additional $50 million to states that filed similar charges. BlockFi Unpaid Around $30M in SEC Fines. Sasha Hodder, founder of crypto law firm Hodder Law, said that BlockFi is most likely to pay the SEC first, with customers last .

Risk exposure of relevant institutions to BlockFi

Nexo

Encrypted lending platform Nexo officially stated that it has zero risk exposure to BlockFi and Genesis, and has never provided it to other companies Through unsecured loan servicing, the focus has been on automated, secured credit facilitation to ensure sustainable growth.