BlockFi Inc and eight of its subsidiaries declared bankruptcy on Monday.
BlockFi has a cash balance of $256.9 million.
BlockFi intends to recover all FTX funds. However, the company anticipates a delay in recovery.
As a result, BlockFi, a cryptocurrency lender, filed for Chapter 11 bankruptcy protection on November 28, becoming the latest industry casualty after being affected by exposure to the speculator collapse of the FTX exchange.
BlockFi's bankruptcy filing also comes after two of BlockFi's main competitors, Celsius Network and Voyager Digital, declared bankruptcy in July, citing unfavorable market conditions that resulted in losses for both companies.
Meanwhile, BlockFi stated in its bankruptcy filing on Monday that it had around $257 million in cash on hand to help fund its operations during the bankruptcy. As per court filings, the company has over 100,000 creditors and $10 billion in assets and obligations.
The company officials noted that they "will focus on recovering all obligations owing to BlockFi," but that "recoveries from FTX will be delayed" due to the current bankruptcy proceedings at the fallen crypto exchange.
Officials also stated that the company will seek judicial approval to continue operations, and they want to undertake a critical Employee Retention Plan. They also stated that BlockFi will reduce expenses considerably, especially labor costs.
Furthermore, in its bankruptcy filing, BlockFi stated that it had recruited Kirkland & Ellis and Haynes & Boone as bankruptcy attorneys, as well as Berkeley Research Group as financial advisers.
However, BlockFi is not the only company that has been affected by the FTX meltdown; companies such as Genesis, Gemini, and Crypto.com are also on the edge of going bankrupt.
Since the second week of November, Genesis Global Capital and its lending operation have received a lot of attention. This is because withdrawals and new loan originations have been halted. It was also claimed that the company had recently hired a restructuring consultant because it wanted to investigate several alternatives before filing for bankruptcy.
Although Genesis later announced that it has no intention of filing bankruptcy, the firm's financial situation has indicated a shift toward seeking external assistance and sound advice to navigate the crisis.
Meanwhile, only time will tell which FTX-linked crypto firm will be the next to file for bankruptcy. Until then stay tuned with CoinGabbar for the latest crypto market updates.
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