SA国际传媒

Crypto lender is the latest heavily funded company in the cryptocurrency space to file for bankruptcy.

Earlier today, the Jersey City, New Jersey-based company that it has filed under Chapter 11 of the U.S. Bankruptcy Code. BlockFi said it plans to put together a restructuring plan with the intent 鈥渢o stabilize its business鈥� in a manner 鈥渢hat maximizes value for all clients and other stakeholders.鈥�

As part of its restructuring efforts, BlockFi said it will focus on recovering obligations owed by counterparties, including FTX and associated entities. Due to the recent collapse of , the expectation is that recoveries will be delayed.

Founded in 2017 by finance industry pros and , BlockFi secured over $900 million in equity backing over the years. Its lead investors include , , , and . The company also raised $400 million in debt financing in June, backed by , in a deal that also offered FTX the option to buy BlockFi, reportedly for as . (At its peak, around August, 2021, BlockFi had a valuation around $4.5 billion.)

The FTX contagion

In mid-November, after FTX鈥檚 collapse, BlockFi said it was and asking clients not to submit deposits. The company said 鈥渞umors that a majority of BlockFi assets are custodied at FTX are false,鈥� but acknowledged that it did have 鈥渟ignificant exposure to FTX and associated corporate entities.鈥�

BlockFi is one of a number of well-funded players in the crypto space with significant ties to FTX. As we鈥檝e previously reported, FTX鈥檚 tentacles reached nearly everywhere in the crypto industry. It invested in nearly 50 companies through its venture arm, . It also made another 180 investments through 鈥檚 other trading firm .

FTX also had a deep reach into the crypto lending space, which had taken off in recent years as prices soared and lenders could bring in new customers with the promise of high yields on their deposits.

Illustration: