Crypto Lender BlockFi Goes Bankrupt in Wake of FTX’s Fall
- The digital-asset lender filed for bankruptcy in New Jersey
- Firm asked clients to refrain from depositing more funds
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Crypto lender BlockFi Inc. filed for bankruptcy, becoming the latest digital-asset firm to collapse in the wake of the rapid downfall of the FTX exchange and stoking worries that more corporate failures lie ahead.
BlockFi said in a statement Monday that it will use the Chapter 11 process to “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities,” adding that recoveries are likely to be delayed by FTX’s own bankruptcy. Chapter 11 bankruptcy allows a company to continue operating while working out a plan to repay creditors.