The crypto firm closely linked to FTX reports that it has $256 million in cash to support operations and liquidity during its restructuring.
The reverberations of FTX‘s collapse continued Monday when cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection.
The crypto firm and eight of its affiliate companies filed the bankruptcy claim in the US Bankruptcy Court for the District of New Jersey. BlockFi’s filing comes as part of its restructuring efforts and “will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities,” the company reported in a press release.
Since FTX’s downturn, BlockFi said that the recovery process would be delayed a bit. Today, we have greater clarification about just what that will entail.
“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the Company,” company financial advisor Mark Renzi said in a news release. “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 intends to continue business as soon as possible through the filing; key plans inlcuding reducing expenses, including labor costs. Decrypt reports that BlockFi is preparing to lay off a significant portion of its staff due to its bankruptcy and restructuring plans.
BlockFi paused activity on its platform earlier this month, which allows investors to buy, sell and earn cryptocurrencies via a mobile app. This decision came amid FTX filing for bankruptcy itself.
BlockFi initially limited activity on its platform starting Nov. 10, but it has since halted all of its products and movement on its platform.
It’s worth noting that when crypto lenders and firms halt withdrawals and activity on their platforms, bankruptcy filings soon follow.
BlockFi reports that it has $256.9 million in cash on hand to carry it through liquidity and operations during the company’s restructuring. Per the bankruptcy filing, BlockFi has more than 100,000 creditors, $1-10 billion in liabilities, and $1-10 billion in assets. The filing shows that BlockFi owes the SEC $30 million since the commission is currently one of the company’s creditors.
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