According to a Reuters report, BlockFi made its first appearance in bankruptcy court in Trenton, New Jersey, on Tuesday, requesting customary permission to continue operations while it works to devise a plan to repay creditors owing more than $1 billion through reorganization or acquisition.
BlockFi attorney Joshua Sussberg told the Trenton, New Jersey, court that the company’s bankruptcy was caused by its significant exposure to FTX, which filed for Chapter 11 protection earlier this month after traders removed $6 billion from the platform, as well as broader turbulence in crypto markets.
The company will attempt to recover $680 million owed to it by a portion of Sam Bankman-collapsed Fried’s crypto company.
Sussberg went to considerable efforts to disassociate BlockFi from FTX, claiming that the firm did not encounter the plethora of problems that FTX seemed to be experiencing.
While FTX’s new CEO has outlined attempts to discover lost funds and a complete collapse of corporate controls, the attorney claims that the company had mature and consistent leadership, employed the correct specialists, and executed the proper procedures and protocols.
BlockFi declared bankruptcy on Monday, following in the footsteps of FTX, the beleaguered exchange whose recent demise has shaken the crypto sector to its core. The company stated in its bankruptcy case that the company owes money to over 100,000 creditors.
The crypto lender halted withdrawals from its platform earlier in November due to concerns about the stability of FTX. Celsius Network and Voyager Digital, two of the main competitors, have previously declared Chapter 11 bankruptcy.
BlockFi had liquidated a portion of its crypto assets to fund its bankruptcy earlier in November, and it entered bankruptcy with $256.5 million in cash on hand.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Website: coincu.com
Harold
Coincu News
