Blockfi Bankruptcy Filing – Five Things We Know

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  • Blockfi filed for Chapter 11 bankruptcy yesterday
  • The filling revealed a huge gap between its assets and liabilities
  • What were the key takeaways from the filing?

Lending platform Blockfi yesterday filed for Chapter 11 bankruptcy and began laying off staff, revealing that its liabilities far outweigh its assets. The filing has revealed all sorts of nuggets of information about the firm, so here are some key takeaways from its collapse.

Assets outweigh liabilities

In its Chapter 11 bankruptcy filing, Blockfi was asked to state its assets versus liabilities. The company confirmed that its assets totaled only $256 million but its liabilities sat in the range of $1-$10 billion. Clearly this wasn’t something that just snuck up on the company, and one wonders how long it has been in this position for.

Over 100,000 creditors

In its filing, Blockfi said it owed money to more than 100,000 creditors. The largest of these is Ankura Trust, which is owed $729 million, while FTX is next in line with $275 million. Talking of FTX…

Blockfi exceeded initial FTX loan

In June, Blockfi secured a flexible $250 million loan from FTX, which Blockfi CEO Zac Prince said at the time would provide the company with “access to capital that further bolsters our balance sheet and platform strength.” However, the records show that Blockfi owes FTX $275 million, meaning the flexibility of the loan was very much utilised.

The fact that Blockfi halted withdrawals on the same day that FTX filed for bankruptcy shows just how tied the former was to the latter.

SEC still owed $30 million

One of the creditors that will be fighting for a piece of what’s left from Blockfi is the Securities and Exchange Commission, which is still owed $30 million from the $100 million it fined BlockFi in February.

Lawsuit filed against SBF investment vehicle

Blockfi is suing the investment company owned by FTX’s head criminal Sam Bankman-Fried in an attempt to seize shares in Robinhood that it allegedly pledged as collateral just days before FTX collapsed. Emergent Fidelity Technologies bought 7.6% of Robinhood for $482 million in February, and Blockfi has demanded it turn over these shares as compensation for Alameda Research defaulting on $680 million of collateralized loans in early November.