Crypto firm BlockFi files for Chapter 11 bankruptcy protection in New Jersey

Digital-asset lender BlockFi Inc., a cryptocurrency company that once enjoyed a valuation of $3 billion, has filed for Chapter 11 bankruptcy protection in New Jersey, according to a Monday press release. The firm is the latest major crypto company to be felled by the ructions in the cryptocurrency space that have intensified since the start of 2022. BlockFi cited the downfall of cryptocurrency exchange FTX and its associated companies for pushing it over the edge into. As a result, representatives of the company said in the press release that BlockFi will focus on recovering all obligations owed to it by FTX and other companies, although it expects these efforts will be “delayed.” BlockFi said it has $256.9 million in cash on hand, which it plans to use to continue with ongoing operations during the restructuring process. It has submitted filings to the bankruptcy court asking that it be allowed to continue paying employees and providing their benefits to support ongoing operations. Alongside the bankruptcy court filing in New Jersey, BlockFi International, a Bermuda incorporated company, has filed a petition with the Supreme Court of Bermuda for the appointment of joint provisional liquidators in accordance with Bermuda law. However, the company expects client claims will be handled through the Chapter 11 process. BlockFi is only the latest crypto company to declare bankruptcy this year. Earlier this month, FTX collapsed. The company was among the firms that had agreed to a bailout from FTX earlier this year.