On Nov. 28, 2022, the crypto lender Blockfi informed the public via a press release that the company has voluntarily petitioned for Chapter 11 bankruptcy protection. Blockfi is now one of many digital currency businesses dealing with significant financial hardships and bankruptcy proceedings in 2022.
Blockfi Voluntarily Petitions for Chapter 11 Bankruptcy Protection
Blockfi has officially filed for bankruptcy protection according to a press release distributed on Monday morning at 10:17 a.m. (ET). The Chapter 11 bankruptcy filings encompass the crypto lender Blockfi and eight of its affiliates.
The crypto firm insists the plan is to “stabilize its business and provide the company with the opportunity to consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders.” Blockfi has cited the FTX collapse as a period when the company took steps to protect Blockfi customers.
On Nov. 10, 2022, Bitcoin.com News reported that Blockfi had paused withdrawals and the firm also cited FTX in that specific announcement. Months prior it was assumed that FTX would be buying Blockfi as the company’s CEO said in July that the exchange had an “option to acquire” the crypto lender.
“With the collapse of FTX, the Blockfi management team and board of directors immediately took action to protect clients and the company,” the company’s financial advisor Mark Renzi detailed. “From inception, Blockfi has worked to positively shape the cryptocurrency industry and advance the sector. Blockfi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”
Compute North, Voyager Digital, Celsius, Three Arrows Capital, and FTX have all filed for bankruptcy protection after dealing with financial problems. Numerous problems are reportedly associated with over-leveraged assets and the Terra blockchain implosion that took place six months ago.
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