Crypto Lending Platform BlockFi Filed for Bankruptcy as FTX Fallout Spreads

Crypto lending platform BlockFi has filed for bankruptcy protection on Monday, becoming the latest crypto casualty hurt by exposure to the spectacular collapse of the FTX exchange​.

Zac Prince, the founder of BlockFi, said in a bankruptcy filing that the company's substantial exposure to FTX created a liquidity crisis. BlockFi listed its assets and liabilities as being between $1 billion and $10 billion. According to a press release, the crypto exchange has about $256.5 million in cash on hand.

In a court filing on Monday, BlockFi said the biggest of its 50 largest outsider creditors is Ankura Trust Company, a trust company that specializes in stressed and distressed situations, and to which BlockFi owes $729 million in unsecured claims. The company's big creditors include West Realm Shires Inc., the corporate entity behind FTX.US, which has a $275 million unsecured claim, and the Securities and Exchange Commission (SEC), which has a $30 million unsecured claim. 

The exchange said it owes money to more than 100,000 creditors. It also stated in a separate filing it plans to lay off two-thirds of its 292 employees.

BlockFi's first bankruptcy hearing is scheduled to take place on Tuesday, as reported.