As FTX contagion sweeps crypto markets, BlockFi declares bankruptcy

BlockFi, a cryptocurrency lender, declared bankruptcy on Monday, becoming the latest victim of the financial contagion unleashed by the fall of Sam Bankman-business.

BlockFi suspended withdrawals earlier this month, citing considerable exposure to Bankman-FTX Fried's exchange and its sibling hedge fund Alameda. On 11 November, FTX, Alameda, and hundreds of affiliates declared bankruptcy.

According to the organisation, during the halt, the team has studied every strategic option and alternative open to them and has stayed laser-focused on their core goal of delivering the best they can for their clients.


Zac Prince and Flori Marquez started the privately owned corporation in 2017 and issued consumer loans using crypto assets as collateral. BlockFi has about $257 million in cash, which the business believes will provide adequate liquidity to support it during the reorganisation process.

Layoffs will be part of the reorganisation. It was unclear how many staff would be let go, but the corporation claimed it had begun an internal effort to decrease spending, including personnel costs, significantly.



Over the summer, the New Jersey-based firm was one of several that needed financial assistance from Bankman-Fried, as dropping crypto prices threatened to bring down significant participants in the digital asset ecosystem. BlockFi received a $400 million economic lifeline from FTX in July.

The repercussions of FTX's demise are reverberating across the crypto sector. Soon after FTX's bankruptcy, Genesis’ lending arm halted redemptions and new loan originations due to an unusual volume of withdrawal requests that exceeded its current liquidity, claiming market turbulence caused by FTX's demise.

FAQs:

1. What is FTX?
   FTX is one amongst the biggest exchanges where those digital assets are traded, and it has been lauded as one of the most transparent crypto operations by regulators and market observers.
2. What does BlockFi do?
   BlockFi is a one-stop shop for bitcoin enthusiasts. It offers a variety of financial products, including low-interest loans and a cryptocurrency rewards credit card.