BlockFi Just Filed for Bankruptcy

A sign of a deeper "crypto winter" is that another major lender has filed for bankruptcy.

Less than a month after FTX, the second largest exchange by trading volume, collapsed in spectacular fashion, BlockFi filed for Chapter 11 protection.

We don't know if the filing will allow it to restructure or if it will allow it to stay in business.

Significant Exposure

FTX went under in a major destabilizing event that wiped out a $32 billion valuation in a matter of days and BlockFi had already announced it was pausing withdrawals.

Blockfi's business was affected by FTX's collapse.

"We have significant exposure to FTX and associated corporate entities that encompass obligations owed to us by Alameda, assets held at FTX.com and undrawn amounts from our credit line with FTX.US."

Reimbursement

There is a lot to answer for. The company is liable for between $1 billion and $10 billion according to the AP.

The company was worth $4.8 billion at one point. Blockfi has just $257 million in cash, which it hopes will be enough to turn its operations around.

BlockFi files for Chapter 11 as FTX affects other areas.

The FTX collapse has another company preparing to file for bankruptcy.