According to an official press release, BlockFi has commenced restructuring proceedings to stabilize the business and maximize value for its customers and stakeholders. The proceedings began with a voluntary case under Chapter 11 of the United States Bankruptcy Code. The filing is before the Bankruptcy Court for the District of New Jersey.
Many crypto firms have had a fair share of the FTX contagion in the past few weeks. While the market mourns the collapse of the crypto exchange giant, asset prices are down, and many firms are about to close shop.
News of another victim of the contagion reached the industry. The latest reports stated that the crypto lending firm, has commenced Chapter 11 bankruptcy proceedings.
While people believe that the FTX contagion contributed to the firm’s ordeal, Stuart Alderoty has a contrary view. According to Alderoty, Ripple’s general counsel, the Securities and Exchange Commission is said to be responsible for the circumstances surrounding BlockFi’s bankruptcy.
BlockFi Bankruptcy, Another SEC Regulation By Enforcement
In his tweet, Alderoty alleged that BlockFi’s problem is another regulation by-enforcement success story of the SEC. The counsel asserted that the $100 million enforcement fine that the SEC charged BlockFi contributed to the firm’s bankruptcy.
He also raised questions about the $270 million loan outstanding and some unknown amounts owed to BlockFi by FTX. The lawyer further stated that there is no record of the loan unpaid, including the unknown amounts owed to BlockFi by FTX.
He raised questions about the fine in the SED/BlockFi deal and whose money was used for the payment. Alderoty claimed that it must be the customers’ money, which could be the reason for the firm’s insolvency. According to reports, Alderoty questioned the commission to show BlockFi’s ability to pay the settlement.
According to reports, the firm’s creditors are over $100,000, while its assets and liabilities range between $1 billion and $ billion. The largest creditor is Ankura, a trusted company that owes over $729 million. Ankura is also a trustee of BlockFi’s interest account.
As per BlockFi, the liquidity crunch is because of its exposure to FTX through loans to Alameda Research. The firm stated that it intends to lay off most of its 292 employees in a separate filing.
State Of Current Crypto Market
Meanwhile, the crypto market is still absorbing the shock from the FTX collapse. Bitcoin, the largest cryptocurrency, has lost most if its value since the crisis. Experts suggest that BlockFi’s chapter 11 restructuring indicates crypto market-related risks.
Bitcoin price swings upwards l BTCUSDT on Tradingview.com
However, the market has recovered a bit in the last 24 hours. Bitcoin has added gains in the past 24 hours and is trading at $16,853 today.
Featured image from Pixabay, chart from TradingView.comWith Gary Gensler out as SEC Chair, the crypto industry celebrates. President Trump has named Commissioner Mark Uyeda as acting chair until Paul Atkins is confirmed by the Senate.
KikyoSam Altman took to X to temper growing excitement about OpenAI's progress, addressing speculation that the company had secretly achieved superintelligence. He, along with other team members, worked to quell the hype and clarify the company's current capabilities.
CatherineGoogle Trends shows a surge in interest in buying cryptocurrency, driven by President Trump’s meme coin launch, inauguration, and anticipation of crypto-friendly policies, which has propelled digital assets into the mainstream.
KikyoThe launch of President Trump's Department of Government Efficiency (DOGE) has faced multiple lawsuits challenging its legality and transparency. Despite these legal hurdles, Elon Musk continues to lead the panel, while Vivek Ramaswamy steps down to run for Ohio governor.
WeatherlyCuba's Ministry of Foreign Affairs' X account was linked to a series of controversial memecoin launches, including the "CUBA" token, which saw a rapid rise and fall, leading to accusations of a pump-and-dump scheme. Although the Ministry claimed the account was hacked, the incident remains clouded in speculation and confusion, with investors expressing frustration.
AnaisWithin his first day back in the White House, President Donald Trump revoked Joe Biden’s October 2023 executive order on AI, which had outlined a regulatory framework and reporting requirements for AI companies.
CatherineQatar Airways launched Sama, an AI-powered virtual cabin crew member, on Instagram. The airline partnered with UneeQ to create Sama's digital presence.
AnaisScammers are using fake websites to trick crypto users into participating in fraudulent transaction simulations, stealing funds when users approve the altered transactions. New users are especially at risk, and they are advised to buy crypto only from trusted, regulated platforms.
WeatherlyScammers exploited the high-profile launch of the TRUMP and MELANIA meme coins, flooding the market with over 6,800 fraudulent tokens. In just 24 hours, these scams raked in $4.8 million from 12,641 wallets. Was the Trump family’s launch poorly timed, or was the surge in scams an inevitable result of its massive publicity?
CatherineD.O.G.E, formed by Trump’s executive order, faces mounting legal challenges post-Inauguration Day. With Vivek Ramaswamy's departure, Elon Musk is left to steer DOGE through the storm. Can he withstand the pressure?
Kikyo
