BlockFi is reportedly filing for bankruptcy amid FTX contagion

Crypto lender BlockFi would file for Chapter 11 bankruptcy protection, an insider said. BlockFi is the latest crypto firm to file for bankruptcy after the collapse of FTX’s crypto empire.

In an official statement, the company said it “will focus on recovering all obligations owed to BlockFi,” but that “recoveries from FTX will be delayed” due to the ongoing bankruptcy proceedings at the fallen crypto exchange.

The crypto lender is also laying off a large portion of its staff, the source told Decrypt.

BlockFi halted withdrawals on Nov. 11, the same day FTX filed for bankruptcy.  “We, like the rest of the world, found out about this situation through Twitter,” BlockFi wrote in a letter back then. “We are shocked and dismayed by the news regarding FTX and Alameda.”

A week later, a source at the company revealed that it was considering filing for bankruptcy, given its massive exposure to FTX.

Earlier, BlockFi announced June a revolving $240 million line of credit with FTX roughly a week after the crypto lender cut staff by roughly 20%, citing “the dramatic shift in macroeconomic conditions worldwide.”

BlockFi isn’t the only platform that FTX has bailed out. Voyager Digital also landed a $500 million line of credit in June from FTX’s sister firm Alameda Research. Later, Voyager had halted withdrawals and filed for bankruptcy on July 6.

Meanwhile, another troubled crypto lender Genesis Global Capital has hired specialists from Moelis & Company to consider restructuring options, including a potential bankruptcy, The New York Times reported.