Crypto firm BlockFi files for bankruptcy after FTX collapse

The troubled crypto steadfast BlockFi has filed for bankruptcy successful the US, arsenic the melodramatic illness of FTX continues to reverberate crossed the industry.

The institution had already halted astir enactment connected its platform, citing "significant exposure" to FTX.

BlockFi said it was seeking tribunal extortion to restructure, settee its debts and retrieve wealth for investors.

BlockFi had received a rescue woody from FTX earlier this twelvemonth arsenic the values of cryptocurrencies plunged.

But FTX, a crypto exchange, ran into its ain problems this month, arsenic radical rushed to propulsion wealth from the level amid doubts astir its finances.

Former brag Sam Bankman-Fried, the alleged "crypto king", resigned and the steadfast declared bankruptcy.

The illness has shaken religion successful the crypto manufacture and drawn scrutiny from regulators.

BlockFi, which offered loans backed by borrowers' crypto assets, described the illness of FTX arsenic "shocking".

In a tribunal filing, New Jersey-based BlockFi said it owed wealth to much than 100,000 creditors. It listed crypto speech FTX arsenic its second-largest creditor, with $275m owed connected a indebtedness extended earlier this year.

It said the Chapter 11 bankruptcy filing would let the steadfast to make a "reorganization program that maximizes worth for each stakeholders, including our valued clients".

The institution said it had astir $257m successful currency connected hand.

"From inception, BlockFi has worked to positively signifier the cryptocurrency manufacture and beforehand the sector. BlockFi looks guardant to a transparent process that achieves the champion result for each clients and different stakeholders," said Mark Renzi of Berkeley Research Group, the company's fiscal advisor.