BlockFi owes more than $1 billion to three of its largest creditors, including $30 million it has yet to pay to the US Securities and Exchange Commission as part of the $100 million settlement announced in February, according to the company’s bankruptcy filing.
In all, BlockFi owes its 50 largest creditors $1.3 billion, according to a bankruptcy filing, and has between $1 billion and $10 billion in assets and liabilities. Initial bankruptcy filings only require companies to check a box next to Domains, but the filing said BlockFi has more than 100,000 creditors.
These liabilities include $729 million owed to Ankura Trust, the trustee through which the company operates its interest-earning BlockFi accounts as part of agreement with the SEC To update and register the product.
BlockFi suspended registration for interest-bearing accounts in February and then launched BlockFi Yield earlier this month after that. Notification to the Securities and Exchange Commission on file. By definition, securities registered under the SEC Exemption (D) from the SEC’s Implementing Regulations are only available to accredited or wealthy investors.
BlockFi did not immediately respond to a request for comment Decrypt.
company Filed for Chapter 11 bankruptcy The protection on Monday followed weeks of speculation that BlockFi would not be able to continue operations in the wake of FTX filing for bankruptcy in November 11th.
BlockFi got a lot of exposure to FTX after it got one $400 million in credit in JulyFollow Tera stablecoin breakdown in May.
When the Terra stablecoin UST lost its peg to the US dollar, it wiped out $40 billion in funds. In the following months it became clear Three Arrows Capital Hedge FundOr 3AC, what founders Su Chu and Kyle Davis called it Tera overexposure (along with illiquid positions in the Ethereum Bitcoin Fund and Grayscale).
As a result of the exposure, crypto broker Voyager Digital released a A promissory note on $661 million in outstanding debt Guilty by 3AC. After hedge fund days Filed bankruptcy. Then Voyager itself He filed for bankruptcy the same week And the percentage networkA crypto lender, which filed for bankruptcy a week later.
BlockFi was also hit by 3AC, but was able to survive due to the revolving credit it received from FTX. At the time, former FTX CEO Sam Bankman-Fried said that “DisappointedMore companies and investors have not stepped in to help struggling players in the industry. Since then, FTX itself has gone under. Bankman-Fried was only weeks ago forced to admit that it was not holding a one-to-one reserve of client funds after a bank’s run on the stock market caused a liquidity crunch.
Now, BlockFi owes West Realm Shares Inc. , the parent company of FTX US, in the amount of $275 million on its revolving credit facility. BlockFi CEO Zac Prince said the deal included an agreement for FTX to acquire the company at a variable price of up to $240 million “based on performance catalysts.” on Twitter.
Yesterday, we signed definitive agreements, subject to shareholder approval, with FTX US for:
1. A $400 million revolving credit facility subject to all client funds, and 2. Option to acquire BlockFi at a variable price of up to $240 million based on performance triggers.
BlockFi also owes another lender $49 million, making it the third largest creditor, but it has omitted the name and contact information, saying only that the person is a customer. The only other creditor in the filing that includes some detail is an institutional loan, which shows a total claim of $21.7 million, but is offset by $19.4 million in collateral, which means BlockFi owes $2.2 million.
The BlockFi entities subject to bankruptcy filing include BlockFi Inc. and BlockFi Services, Inc. and BlockFi International Ltd. and Limited Companies BlockFi Wallet, BlockFi Ventures, BlockFi Trading, BlockFi Lending, BlockFi Lending II, and BlockFi Investment Products.
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