BlockFi Bankruptcy

BlockFi Inc. and eight of its affiliates (collectively, BlockFi) operate a large cryptocurrency platform similar to other large cryptocurrency companies in bankruptcy. Unlike these other companies, BlockFi never issued its own cryptocurrency token.

What Happened?

The recent downturn in the prices of various cryptocurrencies led to BlockFi’s liquidity problems, prompting BlockFi to enter into a loan agreement with FTX on June 30, 2022, in an amount of up to $400 million. As part of the consideration for the loan, FTX enjoyed the option to acquire BlockFi at future date. According to BlockFi, this exposure and dependence on FTX, which itself recently commenced its own bankruptcy proceedings, served as a major factor in BlockFi’s decision to file for bankruptcy. BlockFi filed a plan of reorganization on the same date that it commenced its bankruptcy cases, signaling that BlockFi is prepared for a less rocky trip through the bankruptcy process than FTX.

Filings

Petition for Debtor-Affiliates