From multi-billion dollar valuation to bankruptcy. Crypto lending leader BlockFi is heading for the end

Cryptocurrency lending firm BlockFi, which is financially intertwined with FTX, filed for bankruptcy on Nov. 28, becoming the latest major digital asset firm to fail since FTX.

BlockFi and its eight affiliates formally filed bankruptcy and reorganization application documents with the New Jersey Bankruptcy Court in the United States, and will proceed with Chapter 11 bankruptcy liquidation. According to the documents submitted by the company to the U.S. bankruptcy court, BlockFi has more than 100,000 creditors, and its estimated assets and estimated liabilities are both in the range of US$1 billion to US$10 billion. The company’s top 10 creditors alone are owed nearly $1.2 billion in debt.

The following are BlockFi bankruptcy filings.

Peter Thiel’s venture capital firm Valar ventures holds 19% of BlockFi’s shares：

BlockFi has a total of about 1.3 billion US dollars of unsecured claims. The main creditors are as follows:

Ankura Trust Company was its largest creditor with approximately $729 million worth of unsecured claims, followed by FTX US with $275 million in unsecured claims and the SEC with $30 million.

Let’s sort out the causes and consequences of BlockFi’s collapse.

BlockFi was founded by Zac Prince and Flori Marquez in 2017 to provide loans to customers using their cryptocurrency assets as collateral.

The company received investment from Valar Ventures, which was spun out of Thiel Capital. Bain Capital, Tiger Global Management and a fund ran by the Winklevoss brothers are also among BlockFi’s equity investors, according to PitchBook Data.

BlockFi’s ties to FTX start back in the third quarter of this year, when companies like BlockFi were rescued by FTX after the cryptocurrency price plummeted, disrupting the balance sheets of several lenders, exchanges and bitcoin mining companies. In July, BlockFi secured a $400 million revolving credit facility from FTX in a debt deal that also gave FTX the choice to acquire the company.

But FTX’s unexpected collapse in early November prompted BlockFi to suspend loans and customer withdrawals until it declared bankruptcy on the 28th of November. Making BlockFi the latest cryptocurrency company to go from ambitious to crash and burn.

BlockFi mentioned on Monday, “This action follows the shocking events at FTX and related corporate entities, and we made the difficult but necessary decisions to suspend the majority of activities on our platform.” Meanwhile, BlockFi added that it has “significant” exposure to FTX and expects any recovery of funds from the exchange to be “delayed.”

BlockFi Update.

BlockFi said on Nov. 28 that it will use its bankruptcy to focus on recovering all debts owed to it by counter-parties, including FTX, while BlockFi sold off $238.6 million in cryptocurrency assets to fund its bankruptcy.

So, here’s the question, whose cryptocurrency is BlockFi selling?

As more information is gradually disclosed, the answer to the question will finally be answered, and we will continue to cover BlockFi’s subsequent development for you, just stay tuned.