BlockFi cryptocurrency firm declares bankruptcy

BlockFi, the troubled cryptocurrency firm, has filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey. This comes after the failure of potential buyer FTX. The corporation has over 100,000 creditors and assets and liabilities totaling between $1 and $10 billion.

Client withdrawals from the defunct cryptocurrency exchange FTX and its sister trading firm Alameda Research have been halted by BlockFi. In July, FTX proposed purchasing troubled lender BlockFi and granting a $400 million revolving credit line. The failure of FTX will have a massive impact on crypto traders and other counterparties involved in FTX’s business.

The New Jersey-based company admitted to having “significant exposure” to the now-defunct cryptocurrency exchange FTX and its sister trading firm Alameda Research. Following the demise of FTX, it halted client withdrawals and hired restructuring firms. On November 11, Bankman-cryptocurrency Fried’s exchange FTX filed for Chapter 11 bankruptcy. In July, FTX proposed purchasing troubled lender BlockFi to prevent it from going out of business.