BlockFi and eight of its affiliates have filed for Chapter 11 bankruptcy protection making it the latest cryptocurrency firm to crumple in the wake of crypto exchange FTX’s own collapse earlier this month which triggered uncertainty in the crypto market.
Per the court filing, New Jersey-based BlockFi said it owes debts to more than 100,000 creditors, including $729 million to its largest creditor Ankura Trust Company.
The firm said in a statement that the Chapter 11 filing will 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.
READ: Is FTX-backed BlockFi gearing up for bankruptcy protection?
The company said as part of its restructuring efforts it will focus on recovering all obligations owed to BlockFi by its counterparts, including FTX which also filed for Chapter 11 bankruptcy protection on November 11. As such, BlockFi said it expects recoveries from FTX will be delayed.
BlockFi also noted that it has US$256.9 million in cash on hand, which the company expects will provide sufficient liquidity to support certain operations during the restructuring process.
Platform activity continues to be paused, the company said.
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