Another Crypto Giant Files for Bankruptcy After FTX Collapse / Argentina News

The cryptocurrency company reported that it expects a transparent process that achieves the best result for all clients and other parties.

By iProfessional

11/28/2022 – 9:00 p.m.

The BlockFi crypto lending platform confirmed Monday that he filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey. This occurred after the collapse of FTX.

In the presentation, he stated that it had more than 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.

The company listed an outstanding loan of $275 million to FTX US, the US arm of Sam Bankman-Fried’s now-bankrupt empire.

Like FTX, BlockFi also has a subsidiary in the Bahamas, which filed for bankruptcy there simultaneously with its US filing.

“BlockFi expects a transparent process that achieves the best outcome for all customers and other stakeholders,” Berkeley Research Group’s Mark Renzi said in a press release. BRG acts as a financial advisor to BlockFi.

BlockFi’s bankruptcy filing shows the company’s largest customer has a balance of almost $28 million.

Cryptocurrency company filed for bankruptcy, with more than 100,000 creditors

After the collapse of FTX: is it the end of cryptocurrencies?

The fall from grace has been hard and fast. Less than a month ago, Sam Bankman-Fried was in the stratosphere. FTX, his cryptocurrency exchange, then the third largest, was valued at $32 billion; his own wealth was estimated at $16 billion.

To the effusive Silicon Valley venture capitalists, he was the financial genius who could wow investors while playing video games, destined, perhaps, to become the world’s first trillionaire. In Washington, he was the accepted face of cryptocurrency, communicating with lawmakers and funding efforts to influence its regulation.

Today there is nothing left but a million angry creditors, dozens of shaky crypto companies, and a proliferation of regulatory and criminal investigations. The rapid implosion of ftx has dealt a catastrophic blow to an industry with a history of failure and scandal. Never before has cryptocurrency seemed so criminal, wasteful and useless.

The more that comes to light about the disappearance of FTX, the more shocking the story becomes. The exchange’s own terms of service said it would not lend client assets to its trading arm. However, of the $14 billion of those assets, it had reportedly lent $8 billion to Alameda Research, a trading company also owned by Mr. Bankman-Fried, The Economist noted.

In turn, he accepted as collateral his own digital tokens, which he had created out of thin air. A fatal run on the stock market exposed the gaping hole in his balance sheet. To top it off, after ftx filed for bankruptcy in the United States, hundreds of millions of dollars mysteriously flowed out of their accounts.

The more that comes to light about the disappearance of FTX, the more shocking the story becomes

Big personalities, incestuous loans, overnight collapses…these are the stuff of classic financial manias, from the tulip rush in 17th-century Holland to the South Sea bubble in 19th-century Britain. XVIII, going through the banking crises of the United States at the beginning of the XX century. At its peak last year, the market value of all cryptocurrencies skyrocketed to a dizzying nearly $3 trillion, up from nearly $800 billion at the start of 2021. Today it’s back to being of US$830,000 million.