BlockFi, the exchange that provided lending services along with cryptocurrency trading, filed for Chapter 11 protection today.
BlockFi Inc and its eight subsidiaries became the latest victim of the FTX contagion as it filed for Chapter 11 under the U.S. Bankruptcy code in the United States Bankruptcy Court for the District of New Jersey.
What does the Future Hold for BlockFi?
BlockFi aims to restructure in order to stabilize its business by recovering all obligations they owe from other entities, including FTX. However, the company expects the recovery from FTX will be delayed due to ongoing bankruptcy processes.
“From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders,” says Mark Renzi, the Financial advisor of the company.
The company will ask the approval from the court to continue its operation, and they want to implement a key Employee Retention Plan. According to a BusinessWire report, the company has liquidity of $256.9 million to continue internal operations during the restructuring.
What does the community have to say?
Carl Menger, a crypto influencer on Twitter, reported that BlockFi deleted their team page two weeks ago. He further warned his followers that they should know where their Bitcoins are.
The community believes any crypto exchange that pauses withdrawals is planning for bankruptcy. The exchange halted the withdrawals on Nov. 11, citing a lack of clarity regarding FTX. The community also questions if Nexo or Crypto.com are next
Arthur Hayes, the co-founder of BitMEX says he can’t wait to see the balance sheet of BlockFi. He wonders if Sam Bankman-Fried stuffed BlockFi with FTX tokens. Arthur Hayes believes that Bitcoin will crash to $10,000.
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