Crypto lender, BlockFi approached Binance, the largest exchange, for help.
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Another victim of the catastrophic fall of FTX was the crypto lender company BlockFI. It already halted all withdrawal and limited activity on November 10. According to Wall Street Journal data, the firm considers a Chapter 11 filing. Seeking potential financial help, it also deliberated with Binance.
According to Monday's post, BlockFi has “significant exposure to FTX and associated entities.” The company also denies rumors that “a majority of BlockFi assets are custodied at FTX.” Over the summer of 2022, the company took out a $400 million loan it needed to alleviate financial difficulties arising from the double-dip of LUNA and UST.
BlockFi has enough liquidity to start withdrawing client funds, but at the company's meeting this Monday, the company's plight was made clear, though layoffs have yet to be discussed. The company currently has 300 full-time employees.
Berkeley Research Group (BRG) is a company that is often involved in bankruptcy. On November 14, customers of BlockFi were notified via email that the firm “engaged advisors that are helping [to] navigate BlockFi’s next steps” and that “BRG has been engaged as [BlockFi’s] financial advisor.”
The fall of FTX began with CZ's announcement on Twitter about the liquidation of the native token FTT. Withdrawals of more than $5 billion by clients exposed FTX to a liquidity crisis. The non-binding letter of intent for FTX's acquisition by their rival Binance has been canceled. CZ commented on the failure to go through with the deal by saying that the situation is “beyond our control or ability to help.”
On November 11, FTX filed for bankruptcy of the parent company and all subsidiaries. SBF steps down as CEO of FTX. According to allegations, FTX misused client funds to cover trading losses for the Alameda Research subsidiary.
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