Cryptocurrency lender BlockFi has filed for bankruptcy under Chapter 11 of the Bankruptcy code. BlockFi has approximately $257 million in cash in hand, according to a press release.
A Bermuda-based affiliate has also filed for liquidation, which is a similar procedure. BlockFi’s executives estimate the company has more than 100,000 creditors, according to the petition. BlockFi’s bankruptcy is one of the first domino effects of the FTX collapse.
West Realm Shires Inc., the formal name for FTX US, has a $275 million unsecured claim against the corporation, while the US Securities and Exchange Commission (SEC) has a $30 million unsecured claim .
The names of the majority of the other top-50 creditors were withheld. Ankura Trust Company is BlockFi’s largest creditor, which the lender appears to have engaged in February, and now has a $730 million unsecured claim.
BlockFi Sues Sam Bankman Fried
BlockFi is suing FTX founder Sam Bankman Fried to take his Robinhood shares , which he had allegedly pledged as collateral before his exchange collapsed, according to media reports.
BlockFi has filed the complaint in the New Jersey court, against Bankman’s Emergent Fidelity Technologies vehicle. It is also demanding that Bankman turn in his Robinhood share. Bankman had purchased 7.6 per cent of Robinhood shares earlier this year, according to documents seen by Financial Times.
Maker DAO Votes Against Coinshares $500M Investment
Protocol for Decentralised Lending, MakerDAO, has voted against CoinShares’ plan to invest up to $500 million of the community’s money in a portfolio of corporate debt instruments and government-backed bonds for yield as an investment strategy.
In the end, 72.43 per cent of the votes were cast against the proposition. If the community had voted in favour, CoinShares would have given MakerDAO with a variable annual percentage yield (APY) above the secured overnight financing rate (SOFR) in the community’s preferred currency (DAI, USDC, USD...), which would have been withdrawable on-chain.
Silvergate Has Low Exposure In BlockFi
Crypto firm Silvergate, which caters to institutions, declared on November 28, 2022 that its deposit relationship with BlockFi is “limited to less than $20 million of its total deposits from all digital asset consumers.” According to the firm’s revenue report, these deposits reached $13.2 billion in the third quarter.
Silvergate CEO Alan Lane said, “As the digital asset industry continues to transform, I want to reiterate that Silvergate’s platform was purpose-built to manage stress and volatility.”