BlockFi filed for bankruptcy on November 28 following the latest events that took place with FTX and given the exposure that the coin exchange had with Sam Bankman-Fried's business.
In a statement, BlockFi explained that it “has today initiated a voluntary process under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the District of New Jersey to stabilize its business and provide the company with the opportunity to consummate a comprehensive restructuring transaction that maximizes value for all customers and other stakeholders.”
However, “as part of its restructuring efforts, BlockFi will focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities. Due to the recent collapse of FTX and its ensuing bankruptcy proceedings, which are still ongoing, the Company expects recoveries from FTX to be delayed,” they explain.
“With the collapse of FTX, BlockFi’s management team and board of directors immediately took action to protect customers and the Company,” said Mark Renzi of Berkeley Research Group, the company’s financial advisor. “Since its inception, BlockFi has worked to positively shape the cryptocurrency industry and move the sector forward. BlockFi looks forward to a transparent process that achieves the best outcome for all customers and other stakeholders,” they argue.
The platform's activity remains on hold at this time. BlockFi has $256,9 million in cash, which is expected to provide enough liquidity to support certain operations during the restructuring process. The company stated that it will continue to operate its business internally, which will include some moves to ensure employee pay and benefits without interruption, as well as present a plan to retain staff in key positions and to reduce expenses.
In parallel to these Chapter 11 cases, BlockFi International Ltd., a company incorporated in Bermuda, filed a petition with the Supreme Court of Bermuda for the appointment of joint provisional liquidators.
