- BlockFi has revealed plans to disclose its assets, liabilities, and payments received before its bankruptcy filing on November 22.
- In its 23-page bankruptcy filing, BlockFi points to having over 100,000 creditors, highlighting that its liabilities range from $1 billion to $10 billion.
- FTX, Celsius Network, and Voyager Digital declared Chapter 11 bankruptcy in 2022
In a January 9 announcement, crypto lending firm BlockFi said it would reveal information about all the assets, liabilities, and payments received before the company filed for bankruptcy in November 2022.
“BlockFi expects to file its Schedules of Assets and Liabilities and its Statement of Financial Affairs with the Court on January 11, 2023.”
According to BlockFi, the filings will feature information regarding payments made to insiders among other parties before the bankruptcy filing in November.
The Jersey City-based company also presented to all stakeholders the key metrics and context of the bankruptcy proceedings. The presentation detailed future court filings alongside a brief overview of the case.
Based on reports from the lending company, they reached out to 106 prospective buyers shortly after the first bankruptcy hearing in November 2022, adding that they would seek court approval for the bidding process on January 30.
The lending company also disclosed plans to file its assets and liabilities attached with a statement of financial affairs on Wednesday, January 11.
BlockFi Employees Also Affected
BlockFi also articulated that since October 14, 2022, all company staff still had to withdraw any crypto from the platform. In the same way, they had not made any withdrawals above 0.2 BTC since August 17, 2022. Like other clients, BlockFi alleges that its management team had also invested their assets on the platform for trading, interest earning, and storage of different cryptocurrencies governed by the exact terms of service.
To put this in context, the crypto lending firm completed a total of $7.7 billion in retail withdrawals, and the management team’s withdrawals represent 0.15% of that total volume in 2022. Noteworthy, BlockFi raised its base salaries after a $400 million revolving credit facility from FTX US, alongside making retention payments to some of its employees.
These proclamations come after the U.S. Department of Justice (DoJ) notified the court in charge of the bankruptcy case that it had seized more than 55 million shares of Robinhood, worth approximately $450 million as of press time.
All these were part of the criminal case against the since-collapsed crypto exchange FTX and its executives led by Sam Bankman-Fried. As BlockFi had specific financial exposures to FTX, the lender was among the parties claiming rights to the shares.
Bankruptcy Filings Across 2022
In 2022, several crypto-related firms filed for Chapter 11 bankruptcy protection, including FTX, Celsius Network, and Voyager Digital. Following the crisis declarations, many users reported losses totaling millions of dollars.
The latest public hearing regarding the FTX bankruptcy case took place on January 11, today, but BlockFi expects an omnibus hearing slated for January 17. In a statement, the company noted:
BlockFi looks forward to continuing its open dialogue with the UCC, U.S. Trustee, and all stakeholders in its chapter 11 cases. More information related to the Claims Process and the filing of Proof of Claims will be sent to clients at the appropriate time. Please note that, at this time, no deadlines have been set.”
BlockFi, the privately held firm established in 2017 by Zac Prince and Flori Marquez, was among those who filed for Chapter 11 bankruptcy protection almost two weeks after pausing withdrawals of customer deposits, citing significant exposure to the defunct crypto exchange FTX.
Almost eight other affiliated companies, including its Bermuda subsidiary, are involved in the ongoing bankruptcy proceedings.
In its 23-page bankruptcy filing, BlockFi points to having over 100,000 creditors, highlighting that its liabilities range from $1 billion to $10 billion. The lender has about $257 million in cash on hand, which according to BlockFi, will offer enough liquidity to enable operations as the restructuring process continues.
