BlockFi Inc. sold about $239 million of its own cryptocurrency and warned nearly 250 workers that they would lose their jobs as it prepares to file for Chapter 11 bankruptcy.
According to Bloomberg News, BlockFi’s advisor, Mark Renzi, said in an affidavit in court on Monday that the company sold the positions to cover the costs of the expected bankruptcy and had no the plan is financed by loans while protected by the courts.
The crypto lender has already begun cutting costs in preparation for the restructuring, including warning that two-thirds of its nearly 370-plus employees, 250 employees will lose their jobs.
Renzi said the company intends to restructure in bankruptcy court rather than sell itself, but is open to any deal that maximizes the interests of its creditors. Ultimately, he said, what users get will largely depend on whether other crypto players fulfill their contracts with BlockFi and the outcome of the bankruptcy of the FTX Group.
“Despite the hopes of debtors, the full impact of the FTX bankruptcy is yet to be determined,” Renzi said. He said the company “had no choice” but to seek court protection from creditors following the bankruptcy of FTX.
In his statement, Renzi believes that BlockFi is in a better position than FTX. There were no flaws in corporate control or system integrity, and I find BlockFi’s financial information to be reliable.”
As was previously updated, BlockFi made its first appearance in bankruptcy court in New Jersey and officially filed for Chapter 11 bankruptcy with over 100,000 creditors, assets and liabilities ranging from $1 billion to $10 billion.
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