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Bruce B. Nov 30, 2022
Financial Services News
Last active over 7 days
Last active over 7 days
Lawyers for BlockFi, made their initial appearance in U.S. bankruptcy court, emphasizing that the U.S. cryptocurrency lender was “the antithesis of FTX.”

BlockFi’s attorney told the court that the company’s bankruptcy stemmed from its substantial exposure to FTX, which filed for Chapter 11 protection earlier this month after traders pulled $6 billion from the platform.

FTX had extended a $400 million lifeline to BlockFi in July, but the Bahamas-based exchange spectacularly imploded, sparking fears of contagion across the industry just days after BlockFi asked it for additional financing on Nov. 8.

Attorneys went to great lengths to distance BlockFi from FTX, saying the company did not face the myriad issues apparently plaguing FTX. Saying “This is completely, 180 degrees, a different story.”

BlockFi said it owes money to more than 100,000 creditors. It listed FTX as its second-largest creditor, with $275 million owed on a loan issued earlier this year.

BlockFi’s largest creditor is Ankura Trust, which is owed $729 million. It still owes $30 million to the SEC from the fine it agreed to pay earlier this year. Valar Ventures, a Peter Thiel-linked venture capital fund, owns 19% of BlockFi equity shares.

BlockFi listed its assets and liabilities as between $1 billion and $10 billion. The company sold a portion of its crypto assets earlier in November to fund its bankruptcy, and it entered bankruptcy with $256.5 million in cash on hand.

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