Blockfi voluntarily submits petitions for protection under Chapter 11 of the Bankruptcy Code
According to a press statement that was sent on Monday morning at 10:17 a.m., Blockfi has taken the necessary legal steps to initiate the bankruptcy process (ET). The cryptocurrency lender Blockfi, along with eight of its affiliated companies, is included in the Chapter 11 bankruptcy proceedings.
The cryptocurrency company is adamant that the objective of the plan is to "stabilize its business and provide the company with the opportunity to consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders." Blockfi has pointed to the collapse of the FTX exchange as an example of a time when the business took measures to safeguard its consumers.
Bitcoin.com News published an article on November 10, 2022, stating that Blockfi had temporarily halted withdrawals, and the company also blamed FTX in that particular release. It had been speculated for a number of months that FTX might purchase Blockfi after the chief executive officer of the firm stated in July that the cryptocurrency exchange had a "option to acquire" the crypto lender.
According to details provided by the firm's financial adviser Mark Renzi, the management team and board of directors of Blockfi promptly took action after the failure of FTX to safeguard both the company and its customers. "Ever since the company was founded, Blockfi has been actively contributing to the growth and development of the cryptocurrency industry. Blockfi is excited about the prospect of a transparent process that will result in the greatest possible conclusion for all of its customers and other stakeholders.
Compute North, Voyager Digital, Celsius, Three Arrows Capital, and FTX are among the businesses that have sought protection under the bankruptcy laws after experiencing difficulties with their finances. It has been reported that over-leveraged assets as well as the implosion of the Terra blockchain that occurred about six months ago are both contributing factors to a number of problems.