Figurines with smartphones and computers are seen in front of the BlockFi logo in this illustration.Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection, it said on Monday , the latest industry casualty after the firm was hurt by exposure to theThe filing in a New Jersey court comes as crypto prices have plummeted. The price of bitcoin, the most popular digital currency by far, is down more than 70 per cent from a 2021 peak.
"Although the debtors' exposure to FTX is a major cause of this bankruptcy filing, the debtors do not face the myriad issues apparently facing FTX," said the bankruptcy filing by Mark Renzi, managing director at Berkeley Research Group, the proposed financial advisor for BlockFi. "Quite the opposite."
Under a deal signed with FTX in July BlockFi was to receive a US$400 million revolving credit facility while FTX got an option to buy it for up to US$240 million. BlockFi's first bankruptcy hearing is scheduled to take place on Tuesday. FTX did not respond to a request for comment.BlockFi's largest creditor is Ankura Trust, which represents creditors in stressed situations and is owed US$729 million. Valar Ventures, a Peter Thiel-linked venture capital fund, owns 19 per cent of BlockFi equity shares.
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