BlockFi announced that it had filed for Chapter 11 bankruptcy. The move comes after several days of speculation on the company’s financial health after the collapse of FTX.
BlockFi has $256.9 million on hand. It has filed motions to pay employee wages and continue employee benefits without disruption. It also seeks to establish a Key Employee Retention Plan to ensure the company retains trained internal resources for business-critical functions and has created an internal plan to reduce expenses.
FTX US received a $400-million credit line at the end of June, leading to worries after the FTX collapse that BlockFi’s exposure would cause it to experience a liquidity crisis. BlockFi halted withdrawals on Nov. 11.
BlockFi states in the filing that it has over 100,000 creditors, assets between $1 billion and $10 billion, and liabilities in the same range. In addition, Valar Ventures is listed as the owner of 19% of the shares in the company.
BlockFi denied that the majority of its assets were custodied at FTX, but it acknowledged, that they have significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US.
