FTX , the bankrupt crypto exchange thatmismanagedcustomer fund and ca n’t account forbillionsin assets , is presently go off like a fail sunshine . The wave of fiscal destruction wrought by the nuclear meltdown now threatens toswallowother company that did business with it , and the belated victim is BlockFi , one of the most well - known decentralized lenders in the crypto sphere .
Once an FTX spouse , BlockFi now has plans to lay off a important chunk of its workforce and is considering file for Chapter 11 failure before long , reportsthe Wall Street Journal , citing several masses familiar with the issue . The loaner had previously admitted to customers that it had “ significant pic ” toFTX ’s mayhemdue to its hearty financial link to the riotous crypto substitution .
BlockFi initially warned customers about the severe body politic of things in a blog post publish Monday . “ We do have significant exposure to FTX and associated bodied entities that encompasses certificate of indebtedness owe to us by Alameda , assets held at FTX.com , and undrawn come from our recognition occupation with FTX.US , ” the company wrote at the clip .
Photo: T. Schneider (Shutterstock)
before this year , BlockFi was already struggling financially from the bang it took during 2022 ’s harsh “ crypto winter , ” but in June it signed a terminus sheet with FTX to secure what was basically a financial bailout . FTX accord to a $ 250 million revolving line of recognition that gave BlockFi “ access to further capital , ” and the two companies made program for next collaboration together . At the time , that must have seemed reasonably exciting . Sam Bankman - Fried , the CEO of FTX , bailed out multiple struggling crypto exchange that are now suffering because of his terrible misdirection .
“ Today ’s landmark promulgation reinforces the commitment that BlockFi has to serve its client and ensuring their fund are safeguarded , ” Zac Prince , CEO & Founder of BlockFi , ironicallycommented , on the twenty-four hour period of the bailout deal . “ This agreement also unlock future coaction and institution between BlockFi and FTX as we work to accelerate prosperity worldwide through crypto fiscal servicing . ” [ Emphasis ours . ]
Now , less than a hebdomad after FTX filed for Chapter 11 , BlockFi is exploring bankruptcy and will lay off some stave , the Journal describe . The troupe , which was oncevaluedat over $ 3 billion , has been play with a bankruptcy pardner at the police force firm Haynes & Boone , Kenric Kattner , fit in to the theme . Gizmodo reached out to BlockFi for comment on the state of matter of the company and will update this story if they respond .
FTX ’s meltdown , which began in devout last week , has sent shudders throughout the web3 world . It is ill-defined just how much damage this whole thing will cause to the large-minded crypto ecosystem . Some have portend that it could be the manufacture ’s tantamount toLehman Brothers , potentially taking down a wad of other company by connection . If BlockFi does go belly-up , it could be the first domino to fall .
BankruptcySam Bankman - fry
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