Yesterday BlockFi acknowledged significant exposure in the form not only of assets on the exchange, but also additional obligations owed to FTX. This was despite earlier rumors that most of its assets were in the FTX exchange. BlockFi Inc. now: Crypto Contagion Spreads after FTX Collapse BlockFi Inc.
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Yesterday BlockFi acknowledged significant exposure in the form not only of assets on the exchange, but also additional obligations owed to FTX, including an undrawn credit line from FTX. This despite earlier rumors that most of its assets were in FTX.
After FTX collapse, Crypto Contagion spreads
According to the latest reports, BlockFi Inc. appears to be in preparation for bankruptcy filings. The potential Chapter 11 filing of the ailing crypto lender follows a temporary halt to client withdrawals last Wednesday due to a “lackof clarity” about Sam Bankman-Fried’s FTX empire.
Read more: This Hedge Fund loses a majority of funds due to FTX Bankruptcy
BlockFi sent a tweet on November 10 saying “We are shocked by the news concerning FTX/Alameda”. The tweet continued to state:
“We, along with the rest of the globe, discovered this situation via Twitter. We are unable to continue business as usual due to the lack of clarity regarding the status of FTX.com and FTX US.
BlockFi’s official blog posted Monday that FTX’s bankruptcy had prompted BlockFi to comment on Monday that it was “the most prudent decision” for many of its platform activities to be halted.
Ironically, FTX had planned to buy BlockFi for up to $240m in July, depending upon the startup’s performance. The potential acquisition had a catch. BlockFi had a $400m revolving credit to keep it afloat in the wake of Three Arrows Capital’s collapse.
What Caused FTX to File Bankruptcy
Binance signed a letter on Tuesday to acquire FTX, in what appeared to be a bailout for the troubled exchange. After Binance’s thorough research on FTX, the plan fell apart less than 24 hours later.
Read More: John Ray III Joins FTX as New CEO
In less than a week, the renowned crypto exchange, once a leader within its field, has been smashed to pieces. Many other organizations will also be affected by the heat.
The post Breaking News: BlockFi Prepars for Potential Bankruptcy Following FTX Collapse appeared originally on CoinGape.