- FTX filed bankruptcy under for Chapter 11 Bankruptcy rules.
- Crypto lender BlockFi is said to have connection with the Bahamian crypto exchange
Recently FTX filed for bankruptcy under Chapter 11 of the Bankruptcy code. According to an official press release, approximately 130 additional companies associated with FTX are on the brink of filing for bankruptcy in upcoming times.
Eric Snyder, a bankruptcy attorney with law firm Wilk Auslander, quoted that bankruptcy serves two immediate functions: it halts any further withdrawals from the exchange and it creates a central place to examine all claims.
Snyder noted, “One of the unknowns is where they’re going to get the funds to operate bankruptcy,” he added, ” We don’t have an answer to that right now.”
FTX partially collapsed on 9 November 2022, and a day after that, Bloomberg delisted Sam Bankman-Fried from the global billionaire list.
Sam Bankman-Fried also reportedly said to resigned from his post of FTX CEO.
It is also noted that more than one billion users are affected by the bankruptcy filing, and around six billion funds are missing from the assets of the crypto exchange.
Meanwhile BlockFi, a globally renowned crypto lender, is inferred to be badly affected by the collapse of the FTX exchange.
11 November 2022, will go down in the history of the crypto industry as a dark day given the bankruptcy filing by one of the world’s largest crypto exchanges.
SBF informed about filing bankruptcy on his Twitter thread and wrote, “FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.”
Sam wrote, “I’m really sorry, again, that we ended up here,” he added, “Hopefully, things can find a way to recover.”
A press release on Bankruptcy Futher states that “ The exchange has $10 billion and $50 billion of estimated liabilities and assets.”
According to data from CoinMarketCap while writing this article FTT, the native token of FTX, is trading at $1.93 with a 24-hour trading volume of $582,157,666.75.
On 11 November 2022, BlockFi noted that it could not operate the business as usual due to uncertainty associated with the bankrupt crypto exchange.
BlockFi is prioritising the safety of its customers from any potential financial damages if the SBF-backed company liquidates. Cryptosphere has already witnessed some of the worst scenarios in the sector, which will not surprise investors.
BlockFi noted on its official website that “the company is not able to operate business as usual, and have limited platform activities including pausing client withdrawals as allowed by the team,we request that clients not deposit to BlockFi wallet or interest account at this time.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2022/11/12/ftx-post-bankruptcy-effects-on-blockfi/