BlockFi casualty of FTX crash

November 30, 2022

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Lawyers for crypto currency firm, BlockFi, has become the first direct casualty of exchange firm FTX’s collapse.

BlockFi’s lawyers made their initial appearance in U.S. bankruptcy court on Tuesday, emphasising that the U.S. cryptocurrency lender was “the antithesis of FTX”.

Attorney Joshua Sussberg told the New York court the company’s bankruptcy stemmed from its “significant exposure” to FTX.

FTX has filed for Chapter 11 protection month after traders pulled $6 billion from the platform.

BlockFi has filed for bankruptcy in the US, as the dramatic collapse of FTX continues to reverberate across the industry.

BlockFi said it was seeking court protection to restructure, settle its debts and recover money for investors.

According to reports, BlockFi had received a rescue deal from FTX earlier this year as the values of cryptocurrencies plunged.

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However FTX, a crypto exchange, ran into its own problems, as investors pulled cash from the platform amid concerns.

Former boss Sam Bankman-Fried, the so-called “crypto king”, resigned and the firm declared bankruptcy.

BlockFi described the collapse of FTX as “shocking”.

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