Crypto CEO Accidentally Describes Ponzi Scheme--UPDATE--Bankman-Fried arrested in the Bahamas on money laundering and fraud charges.
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Lmao
NYT was already getting roasted for their favorable article on SBF, now they are having him as a speaker at a $2,500 event. Really looks unbecoming of them. There's a difference between meeting someone for an article versus putting them onstage. He should be Ken Lay/Bernie Madoff status, but thanks to American culture, he might end up Jordin Belfort status
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BlockFi Files for Bankruptcy as FTX Contagion Spreads
BlockFi received a $400 million line of credit from FTX earlier this year.
BlockFi Files for Bankruptcy as FTX Contagion Spreads
BlockFi received a $400 million line of credit from FTX earlier this year.
By Nikhilesh DeNov 28, 2022 at 10:20 a.m. EST
Updated Nov 28, 2022 at 5:38 p.m. EST
Crypto lender BlockFi filed for bankruptcy protection Monday, days after suspending withdrawals amid the ongoing fallout from exchange FTX's bankruptcy filing.
The company said it was filing for Chapter 11 bankruptcy protection, indicating it hoped to restructure, continuing operations in the meantime. According to a press release, BlockFi has about $257 million in cash on hand. A Bermuda-based affiliate is also filing for liquidation, a similar process.
According to the company's petition, BlockFi's executives estimate the company has more than 100,000 creditors, and checked off the ranges. Executives estimate the company has between $1 billion and $10 billion in both assets and liabilities.
The company's largest creditors include West Realm Shires Inc., the legal name for FTX US, which has a $275 million unsecured claim, and the Securities and Exchange Commission (SEC), which has a $30 million unsecured claim. The majority of the other top 50 creditors' names were not shared.
BlockFi's largest creditor is Ankura Trust Company, which the lender appears to have hired in February and now has a $730 million unsecured claim
BlockFi, which suspended withdrawals a few weeks ago due to the ongoing confusion about FTX's assets, has had a rocky year. The company liquidated a large client earlier this year, and needed a line of credit from FTX to survive earlier this year. In announcing the suspension of withdrawals, BlockFi warned clients not to deposit any funds to its wallet or interest accounts.
The lender was set to raise funding at a $1 billion down round valuation in June, after raising $350 million at a $3 billion valuation in March 2021. As recently as last July, the company was looking to go public within the next year and a half, with a potential $500 million fundraise coming soon.
However, the company had to pay $100 million in February as part of a settlement with the SEC and several state regulators over allegations its high-yield crypto lending product violated state and federal securities laws. As part of the settlement, BlockFi also had to register its BlockFi Yield product with the SEC.
The company cut around a fifth of its workforce in June as the broader cryptocurrency market declined. The market capitalization – one measure of the overall value of the market – fell from over $3 trillion a year ago to $1 trillion by June.
After the collapse of Three Arrows Capital, BlockFi CEO Zac Prince announced that the company had to liquidate a large client, though he did not confirm whether it was Three Arrows or not. Shortly thereafter, crypto exchange FTX extended a $250 million credit facility to the lender, which later morphed into a $400 million credit facility that also gave FTX US the ability to acquire the lender.
However, FTX itself filed for bankruptcy in the second week of November, after days of speculation about whether it was fully liquid. The questions were sparked by a CoinDesk report revealing that much of FTX sister company Alameda's balance sheet was composed of an exchange token, FTT, issued by FTX, which later prompted Binance CEO Changpeng "CZ" Zhao to announce he would liquidate his company's entire set of FTT holdings. FTX later suspended withdrawals.
Amid the confusion, BlockFi announced it would suspend withdrawals, saying it had some number of assets deposited on FTX and was still owed some of the credit FTX had extended.
ogc163
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FTX told customers to deposit money by wiring funds to Alameda's bank accounts, report says
Some customers sent wire transfers as recently as this year, highlighting the tangled relationship between Sam Bankman-Fried's firms, per Bloomberg.
www.businessinsider.com
That doesn’t sound legal
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Exclusive: Sam Bankman-Fried says he's down to $100,000
The former CEO tells Axios about what helped lead to FTX's collapse.
www.axios.com
K
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Luxury Car Resale Values Dropping Almost As Hard As Crypto Values
After crypto firm FTX filed for bankruptcy, the resale value of luxury cars tanked when crypto investors started panic-selling their expensive vehicles.
jalopnik.com
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Bloomberg - Are you a robot?
www.bloomberg.com
Should’ve got a career in standup
