BlockFi reports character 11 bankruptcy filing at SEC

BlockFi, a famous crypto lending platform, reports potential insolvency with character 11 filing after a week of pausing its withdrawals, saying it was affected by FTX, according to WSJ.

Centralized exchanges and crypto firms are slowly coming under crisis after FTX. The reason is SBF and Alameda Research’s financial involvement in these projects.

The news about BlockFi going bankrupt was first going as rumors circulated on Twitter but the company denied these allegations claiming it was simply limiting activity to recover.

However, on Nov 15, BlockFi officially filed for insolvency, making it obvious that huge amounts of its customer deposits were stored on FTX and the failure to retrieve them caused its downfall.

BlockFi has now announced it will lay off employees and apply for character 11 filing bankruptcy.

The crypto lender has been involved with FTX’s entities since the beginning of the year when the exchange announced it was providing $400 to BlockFi but then backed out in July.

Despite stepping away from providing the investment, BlockFi was still involved with SBF and the exchange, so it couldn’t handle the financial pressure once FTX went down.

The crypto lender has approved licenses and regulations in many countries, so the number of customers is most likely at a global scale. SEC will be investigating BlockFi along with FTX’s case.

So far, no details about the insolvency have been shared by US authorities but users hope to receive the right to withdraw their funds from BlockFi.

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