Cryptocurrency lender BlockFi makes first appearance in bankruptcy court
U.S. cryptocurrency lender BlockFi on Tuesday will make its first appearance in U.S. bankruptcy court after filing for Chapter 11 protection on Monday.
BlockFi is expected to tell U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey why it went bankrupt and how it plans to exit from Chapter 11. It has asked Kaplan for authority to continue paying employees, maintain bank accounts, and other measures needed to continue its day-to-day operations during its bankruptcy case.
New Jersey-based BlockFi became the first direct casualty of crypto exchange FTX's collapse earlier this month.
Founded by fintech executive-turned-crypto entrepreneur Zac Prince, the company said its bankruptcy stemmed from its substantial exposure to FTX and broader turmoil in crypto markets.
FTX had extended a $400 million lifeline to BlockFi in July, but the Bahamas-based exchange spectacularly imploded just days after BlockFi asked it for additional financing on Nov. 8.
Earlier in November, BlockFi paused withdrawals from its platform amid uncertainty about FTX's stability.
FTX and BlockFi did not immediately respond to a request for comment Monday.
In a court filing on Monday, BlockFi said it owes money to more than 100,000 creditors. It listed FTX as its second-largest creditor, with $275 million owed on a loan issued earlier this year.
BlockFi's largest creditor is Ankura Trust, which is owed $729 million. It also owes $30 million to the U.S. Securities and Exchange Commission after agreeing to a record $100 million penalty earlier this year. Valar Ventures, a Peter Thiel-linked venture capital fund, owns 19% of BlockFi equity shares.
BlockFi listed its assets and liabilities as being between $1 billion and $10 billion. The company sold a portion
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