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BlockFi files for Chapter 11 bankruptcy

This previous yr has been hectic for the crypto lending platform BlockFi and at present is not any completely different as the corporate shared an announcement that it filed for voluntary Chapter 11 chapter within the U.S. Chapter Court docket for the District of New Jersey.

On November 10 the crypto platform shared in a tweet that it paused exercise, together with withdraws, and said on Monday that “exercise continues to be paused right now.”

The chapter was commenced to “stabilize its enterprise and supply the corporate with the chance to consummate a complete restructuring transaction” for all its purchasers and different stakeholders.

BlockFi says it has $256.9 million in money, which will likely be used to supply “adequate liquidity to help sure operations in the course of the restructuring course of.”

The corporate mentioned it’s going to concentrate on recovering all obligations owed to BlockFi and counterparties like FTX.

In July, FTX signed a deal with the choice to purchase BlockFi for as much as $240 million, the CEO of BlockFi Zac Prince tweeted. Since then, issues have tumbled as FTX collapsed and likewise filed for Chapter 11 bankruptcy, weeks earlier than BlockFi. With that mentioned, “the corporate expects that recoveries from FTX will likely be delayed.”

The corporate said that it has a consolidated quantity of over 100,000 collectors throughout an enormous vary of $1 billion to $10 billion in liabilities and property, in accordance with a court docket filing.This information follows various crypto-focused corporations, like Voyager and Celsius, that are additionally presently going by way of chapter proceedings.

Earlier this yr, the U.S. Securities and Change Fee (SEC) charged BlockFi for failing to register its retail crypto lending product and violating the registration provisions of the Funding Firm Act of 1940, in accordance with a press release in February. To settle the fees, BlockFi agreed to pay a $50 million penalty to the SEC and a further $50 million in fines to 32 U.S. states to settle related fees.

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