BlockFi files for Bankruptcy under Chapter 11
The team behind BlockFi is planning to restructure the platform despite the company’s filing for bankruptcy on 28 November.
BlockFi was a crypto lending platform and now it is only a bankrupt platform because its back-end team failed to provide stable services because of the mismanagement of the user’s funds or we can say the exposure of BlockFi was with bad crypto companies.
On 28 November, BlockFi announced that the company filed for bankruptcy under Chapter 11 in a US district court.
BlockFi confirmed that the team decided to focus on making the platform’ bankruptcy better for the creditors by maximizing the value of the assets on the platform. So it will also focus on getting the funds from the bankrupt FTX exchange.
“Maximising value for all clients and other stakeholders is our priority. This process will help BlockFi to stabilize our business and provide us with the opportunity to work towards consummating a comprehensive restructuring transaction to maximize value,” the Team stated.
The bankrupt crypto lending platform also announced that it will also try to reconstruct the platform, so it will try to bring the funds back from all of its counterparties.
FTX collapse & BlockFi service
FTX exchange collapsed badly on 8 November 2022 because of the panic among the customers & past user’s fund mismanagement by the team. On 12 November, FTX filed for bankruptcy.
Due to the whole situation of the FTX exchange, the BlockFi team confirmed that BlockFi has a $400M line of credit from FTX.US and also confirmed that it has no exposure to the FTX exchange. In this way, BlockFi tried to convince the users that its services are free from any kind of FUD or negative situation.
But we know very well that FTXUS was one of the US-based subsidiaries of the FTX global crypto exchange and FTX filed for bankruptcy under chapter 11 with almost all of its subsidiaries, including FTXUS.
Just before the FTX bankruptcy filing, BlockFi suspended its withdrawal services for the clients.
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