{"id":579802,"date":"2022-11-15T20:23:42","date_gmt":"2022-11-15T20:23:42","guid":{"rendered":"https:\/\/en.ethereumworldnews.com\/?p=579802"},"modified":"2022-11-15T20:23:57","modified_gmt":"2022-11-15T20:23:57","slug":"blockfi-bankruptcy-exposure-to-ftx-wsj","status":"publish","type":"post","link":"https:\/\/en.ethereumworldnews.com\/blockfi-bankruptcy-exposure-to-ftx-wsj\/","title":{"rendered":"BlockFi Likely To File For Bankruptcy Due To Significant Exposure to FTX: WSJ"},"content":{"rendered":"\n<ul><li>Crypto lender BlockFi is reportedly preparing for a potential bankruptcy.<\/li><li>BlockFi is planning to lay off some of its employees.&nbsp;<\/li><li>The lender had suspended withdrawals last week due to FTX\u2019s liquidity issues.<\/li><li>Significant exposure to FTX was revealed earlier this week.&nbsp;<\/li><li>FTX had bailed out BlockFi in July with a $400 million credit line.<\/li><\/ul>\n\n\n\n<p>New Jersey based crypto lender BlockFi is reportedly set to become the latest casualty of the crypto contagion triggered by the bankruptcy of Sam Bankman-Fried\u2019s crypto exchange FTX.&nbsp;<\/p>\n\n\n\n<h2><strong>BlockFi preparing for a potential bankruptcy<\/strong><\/h2>\n\n\n\n<p>According to a <a href=\"https:\/\/www.wsj.com\/articles\/blockfi-prepares-for-potential-bankruptcy-as-crypto-contagion-spreads-11668534824\" rel=\"noopener\">report<\/a> published by The Wall Street Journal, BlockFi is planning to lay off some of its employees. The lender has been among the many firms operating in the crypto space who have had a difficult time dealing with the fallout of FTX\u2019s bankruptcy. People familiar with the matter told WSJ that the crypto lender itself is now preparing to file for a potential bankruptcy.&nbsp;<\/p>\n\n\n\n<p>The signs of trouble became evident when the crypto lender suspended withdrawals and limited activity on its platform on 11 November. The company cited lack of clarity on the status of FTX and <a href=\"https:\/\/en.ethereumworldnews.com\/alameda-research-bought-tokens-before-ftx-listing\/\">Alameda Research<\/a> for this move. This prompted an enforcement action by California\u2019s Department of Financial Protection and Innovation (DFPI), who <a href=\"https:\/\/dfpi.ca.gov\/2022\/11\/11\/dfpi-moves-to-suspend-blockfis-lending-license-confirms-blockfi-no-longer-lending-in-california\/\" rel=\"nofollow noopener\">suspended<\/a> BlockFi\u2019s lending license in the state for 30 days and launched an investigation into the company\u2019s compliance with state laws.&nbsp;<\/p>\n\n\n\n<p>On 14 November, the crypto lender revealed \u201csignificant exposure\u201d to FTX and associated corporate entities including Alameda Research. <\/p>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>While we will continue to work on recovering all obligations owed to BlockFi, we expect that the recovery of the obligations owed to us by FTX will be delayed as FTX works through the bankruptcy process.\u201d the <a href=\"https:\/\/blockfi.com\/november-14-2022-blockfi-update?utm_source=BlockFi+Twitter&amp;utm_medium=organic-social&amp;utm_campaign=Company+News&amp;utm_content=8186868117&amp;utm_term=20221114\" rel=\"nofollow noopener\">official website<\/a> read.<\/p><\/blockquote>\n\n\n\n<p>Following Terra\u2019s collapse in May which triggered this year\u2019s infamous crypto contagion, a number of lenders and exchanges were drastically impacted. The insolvency of Three Arrows Capital left several firms struggling in its wake, including Voyager Digital, Celsius, and BlockFi.&nbsp;<\/p>\n\n\n\n<p>The aftermath saw uncertainty surrounding the crypto lender\u2019s operations and its future. On 21 June, CEO Zac Prince <a href=\"https:\/\/twitter.com\/BlockFiZac\/status\/1539216594383028224?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1539216594383028224%7Ctwgr%5E385c7265c797b26b4421459f1a154b825fdc6513%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.coindesk.com%2Fbusiness%2F2022%2F06%2F21%2Fblockfi-receives-250m-credit-facility-from-ftx%2F\" rel=\"nofollow noopener\">announced<\/a> the signing of a $250 million term sheet with none other than Sam Bankman-Fried\u2019s FTX, who would later be dubbed crypto\u2019s white knight. This was followed by a $400 million <a href=\"https:\/\/twitter.com\/BlockFiZac\/status\/1542934040092856321\" rel=\"nofollow noopener\">credit line<\/a> extended by FTX to Prince\u2019s firm. Ironically, the firm that saved BlockFi has now become the very reason that threatens it\u2019s existence.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Crypto lender BlockFi is reportedly preparing to file for bankruptcy after revealing a significant exposure to FTX. BlockFi is planning to lay off employees in the meantime. <\/p>\n","protected":false},"author":62,"featured_media":579804,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17,2,26],"tags":[108429,108610,7704],"_links":{"self":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/579802"}],"collection":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/comments?post=579802"}],"version-history":[{"count":3,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/579802\/revisions"}],"predecessor-version":[{"id":579806,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/579802\/revisions\/579806"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media\/579804"}],"wp:attachment":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media?parent=579802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/categories?post=579802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/tags?post=579802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}