Published , by Donovan Erskine
Published , by Donovan Erskine
With how massive of a company FTX was, and with its various partnerships in the entertainment and financial worlds, there has been a strong reverberating effect following the crypto exchange’s bankruptcy filing last week. In what’s being referred to as a crypto contagion, several other companies in the business are suffering as a result of their ties to FTX. According to new reports, crypto lender BlockFi could be heading down the bankruptcy route itself.
In a report from the Wall Street Journal, the outlet states that its sources are indicating that BlockFi could be heading towards Chapter 11 bankruptcy, the same form of bankruptcy that FTX filed for last week. Shortly after the news from FTX hit the internet, BlockFi suspended customer withdrawals and deposits on the platform. The company also said that it has a “significant exposure” to FTX. In addition to the bankruptcy filing, BlockFi is expected to lay off a chunk of its workers.
The report also includes a quote from an email BlockFi sent out to users following the move to pause operations. “There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward,” it reads. “BlockFi has the necessary liquidity to explore all options and we have engaged expert outside advisors that are helping us navigate BlockFi’s next steps.” BlockFi held a lot of its assets at FTX and also had a sizable credit line at the crypto exchange.
FTX’s implosion has not only been a nightmare for the crypto exchange and its CEO Sam Bankman-Fried, but a plethora of other companies and people that were associated with the platform in one way or another. BlockFi is just the latest in a growing list of companies in hot water as a result. Even the affiliated companies that will survive FTX’s collapse have had to release statements to reassure users and investors, such as Immutable and Team SoloMid.