Cryptocurrency lending platform files for bankruptcy protection

Cryptocurrency lending platform files for bankruptcy protection

The latest victim of market volatility since FTX’s collapse earlier this month, US cryptocurrency lending Platform BlockFi said on Monday that it has filed for Chapter 11 bankruptcy protection in a New Jersey court along with eight affiliates.

New Jersey-based BlockFi said in a court petition that it owed money to more than 100,000 debtors.

With $275 million outstanding on a loan made earlier this year, it named cryptocurrency exchange FTX as its second-largest creditor.

Read More: FTX Bankrupt Case; Expert claims FTX was operated as a personal fiefdom,” Faces hacks” Missing funds.

Ankura Trust, which represents creditors in difficult situations, is the company’s biggest creditor and is owed $729 million.

In the past, BlockFi has halted withdrawals from its system and admitted it had “substantial exposure” to FTX and its related companies.

The action was taken a few weeks after Sam Bankman-Fried, the company’s founder resigned as CEO and FTX sought bankruptcy relief in the United States.

Following a price crash that rocked the crypto lender earlier in the year, BlockFi and FTX reached an agreement in July to provide the latter with a $400 million revolving credit facility and an option to purchase it for up to $240 million.

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