The largest creditors include the trustee company that manages its BlockFi Interest Accounts, FTX US, and the SEC.

crypto contagion, voyager digital, cryptocurrency, blockfi, breaking push, sam bankman-fried, money, ftx.us, ftx, finance

BlockFi Inc. owes more than $1 billion to three of its largest creditors, including $30 million it has yet to pay the U.S. Securities and Exchange Commission as part of the $100 million settlement that was announced in February, according to the company’s bankruptcy filing.

Altogether BlockFi owes its 50 largest creditors $1.3 billion, according to its bankruptcy filing, and has between $1 billion and $10 billion in assets and liabilities. Initial bankruptcy petitions require only that companies check a box next to ranges, but the filing did say that BlockFi has more than 100,000 creditors.

Those liabilities include $729 million owed to Ankura Trust Company, the trustee through which the company runs its BlockFi Interest Accounts as part of its agreement with the SEC to update and register the product. 

BlockFi suspended registration for the interest-bearing accounts in February, then launched BlockFi Yield earlier this month after notifying the SEC in a filing. By definition, securities registered under the SEC’s Regulation D exemption are available only to accredited, or wealthy, investors.

BlockFi did not immediately respond to a request for comment from Decrypt. 

The company filed its petition for Chapter 11 bankruptcy protection on Monday after weeks of speculation that BlockFi would be unable to continue operating in the wake of FTX filing for bankruptcy on November 11.

BlockFi had a lot of exposure to FTX after it received a $400 million line of credit in July, following the collapse of Terra’s algorithmic stablecoin in May. 

When Terra’s UST stablecoin lost its one-to-one peg with the U.S. dollar, it wiped out $40 billion in funds. In the following months, it became clear hedge fund Three Arrows Capital, or 3AC, had what cofounders Su Zhu and Kyle Davies called an over-exposure to Terra (along with illiquid positions in staked Ethereum and Grayscale Bitcoin Trust). 

As a result of the exposure, crypto broker Voyager Digital issued a default notice for $661 million in outstanding debt owed to it by 3AC. Days later the hedge fund filed for bankruptcy. Then Voyager itself filed for bankruptcy the same week and Celsius Network, a crypto lender, filed for bankruptcy a week later.

BlockFi also had exposure to 3AC, but managed to stay in business because of the revolving line of credit it received from FTX. At the time, former FTX CEO Sam Bankman-Fried said he was “disappointed” more companies and investors weren’t getting involved to help struggling players in the industry. Since then, FTX has itself gone under. Bankman-Fried's company was just weeks ago forced to admit that it did not hold one-to-one-reserves of customer funds after a bank run on the exchange caused a liquidity crisis.

Now, BlockFi owes West Realm Shires Inc., the parent company of FTX US, $275 million on its revolving line of credit. The deal included an agreement for FTX to acquire the company for a variable price of up to $240 million “based on performance triggers,” BlockFi CEO Zac Prince said on Twitter.

Yesterday we signed definitive agreements, subject to shareholder approval, with FTX US for:

1. A $400M revolving credit facility which is subordinate to all client funds, and
2. An option to acquire BlockFi at a variable price of up to $240M based on performance triggers.

— Zac Prince (@BlockFiZac) July 1, 2022

BlockFi also owes another of its creditors $49 million, making them the third-largest creditor, but redacted the name and contact information, saying only that the person is a client. The only other creditor in the filing that includes some detail is an institutional loan, which shows that the total claim is for $21.7 million, but is offset by $19.4 million in collateral, meaning that BlockFi owes $2.2 million.

The BlockFi entities that are covered by the petition for bankruptcy include BlockFi Inc., BlockFi Services, Inc., BlockFi International Ltd., and limited liability companies BlockFi Wallet, BlockFi Ventures, BlockFi Trading, BlockFi Lending, BlockFi Lending II, and BlockFi Investment Products.

Stay on top of crypto news, get daily updates in your inbox.

TECH NEWS RELATED

8 Fixes: Microsoft Windows Security Not Opening

Your PC will be protected from malware and viruses by Windows Security App, which also comes with Windows Defender Service. It can experience issues, like Windows Security Not Opening, much like other Windows applications. When you try to open Windows Security, it could occasionally display odd errors. The Windows Security ...

View more: 8 Fixes: Microsoft Windows Security Not Opening

9 Best Ways To Retrieve A Downloaded Movie On Your Laptop

Watching movies online can be a hassle; Especially when there is a lot of buffering. This is one of the biggest reasons for people to download their movies and watch them offline. However, I found this specific query in a forum where people were asking to recover a downloaded movie ...

View more: 9 Best Ways To Retrieve A Downloaded Movie On Your Laptop

How To Snip Screen On Your Laptop?

Taking a screenshot is not a complicated process. All of us are familiar with at least one way to do it. However, there are several ways to capture your screen for a frame. We made this article to show you all the different ways you can grab your screens. If ...

View more: How To Snip Screen On Your Laptop?

How To Connect AirPods To A Laptop?

The Apple AirPods are, undoubtedly, some of the best earpieces available on the electronics market. With three generations of different AirPods models, these sleek, ivory earphones are quite popular. Apart from the appearance and quality, AirPods are known for being versatile. Irrespective of what the host device is, AirPods can ...

View more: How To Connect AirPods To A Laptop?

Get $8 off flexible stand that mounts your MagSafe iPhone anywhere

Need to stick your iPhone in an unusual place? No problem. Photo: SwitchEasy Some iPhone MagSafe stands are ideal for use at your desk or on your bedside table. Others are car mounts. But what if one mount could go almost anywhere and let you view your handset at ...

View more: Get $8 off flexible stand that mounts your MagSafe iPhone anywhere

7 Best Ways To Fix DistributedCOM Error In Windows

If you open the Event Viewer utility often, you may notice a DistributedCOM Error on Windows. Let’s know what this DistributedCOM Error Windows error is, how it’s caused, and how you can fix it. Contents show 1 What Is the DistributedCOM Error Windows 10 and 11? 2 What is the ...

View more: 7 Best Ways To Fix DistributedCOM Error In Windows

12 Easy Fixes For Webcam Not Working In Windows

Cameras are becoming quite common for PCs. We use meetings on Zoom, Microsoft Teams, Skype, and other options. The operating system might not be at fault if your camera isn’t working. You can use the given solutions to solve the Webcam Not Working Windows issue quickly. We have covered ...

View more: 12 Easy Fixes For Webcam Not Working In Windows

Windows 10 Sound Not Working: 18 Quick And Easy Methods

Is  Windows 10 Sound Not Working on your PC? This is a common issue faced by many Windows users.  If you are one among them, you are in the right place. This article gives you 11 solutions to fix the no-sound issues in Windows 10.  Contents show 1 Reasons For ...

View more: Windows 10 Sound Not Working: 18 Quick And Easy Methods

How Can You See If Someone Is Not Following You On Facebook: 2 Easy Methods

How To Fix This Update Is Not Applicable To Your Computer Error: 11 Quick Fixes

Windows Dual Boot Menu Not Showing: 6 Easy Ways To Fix

12 Best Fixes: Windows 10 Start Menu Search Not Working

Windows Encryption Not Working? 6 Best Ways To Fix

‘Budget’ MacBook Air workstation doesn’t look cheap [Setups]

Windows Update Error 0x80073701: 9 Best Ways To Fix

Best Ways To Fix Slow Internet During VPN On Windows 11

Best free sports streaming apps in 2023

Today in Apple history: Sequel to ‘1984’ Mac ad bombs hard

6 Solutions To Fix Wmpnetwk High CPU Usage In Windows

Saddle up for some solitaire with Pocket Card Jockey: Ride On!

OTHER TECH NEWS

Top Car News Car News