Cryptocurrency firm BlockFi filed for bankruptcy on Monday as the FTX collapse continues to affect companies across the crypto world. BlockFi lends money using cryptocurrency as collateral.
The New-Jersey-based company said it owes funds to more than 100,000 creditors.
- BlockFi owes FTX, its second-biggest creditor, $275 million
- The company also owes the US Securities and Exchange Commission (SEC) $30 million, the outstanding amount from a $100 million fine
BlockFi’s Chapter 11 bankruptcy filing is the latest fall in the world of crypto, with rivals Voyager and Celcius undergoing bankruptcy proceedings since July.
BlockFi and FTX
FTX played a significant role when BlockFi was on the verge of bankruptcy by providing loans of up to $400 million. The deal also gave FTX an option to buy BlockFi as soon as July 2023.
But after FTX’s shocking collapse, the crypto lender, BlockFi, was unable to acquire its funds stored on the former’s platform, leading it to file for bankruptcy.