The FTX recession is gradually spreading to more cryptocurrency companies as BlockFi is the next company to file for bankruptcy.

BlockFi said on November 28 that it filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey and would seek to recover all obligations owed to BlockFi by its counterparties, including FTX.

“Due to the recent collapse of FTX and its subsequent bankruptcy proceedings, which are still ongoing, the Company expects FTX’s recoveries to be delayed,” BlockFi said.

Additionally, BlockFi reported having $256.9 million in cash on hand, which should provide sufficient liquidity during the “restructuring.”

from the recent bankruptcy filing By BlockFi CEO Zachary Prince, BlockFi has over 100,000 creditors, $1-10 billion in liabilities and $1-10 billion in assets.

While activity on the platform remains on hold, the company said it aims to stabilize its business by filing for bankruptcy and aims to complete a restructuring transaction that maximizes value for all clients and other stakeholders.

The filing also revealed that the Securities and Exchange Commission (SEC) is one of the creditors with $30 million. according to a fontthe cryptocurrency lender is also laying off a significant portion of its staff.

BlockFi on the verge of possible bankruptcy for the past few weeks

The crypto lender faced difficulties after popular crypto exchange FTX crashed, and BlockFi halted customer withdrawals on Nov. 11. However, this time, BlockFi stood its ground, clarifying that there was a lack of clarity regarding the FTX issue.

Prior to that, BlockFi COO Flori Márquez informed investors that all deposit, withdrawal, transaction and lending protocols are active.

However, the Crypto firm announced on November 14 that it had “significant exposure” to FTX. At that point, BlockFi confirmed that it had adequate liquidity to explore all options and hired outside advisers like Haynes and Boone to help with its next moves.

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This post Blockfi becomes another victim of FTX collapse with bankruptcy filing

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