Bankrupt crypto lender BlockFi has about $355 million worth of cryptocurrencies frozen on embattled crypto exchange FTX. The figures were revealed by BlockFi’s attorney, Joshua Sussberg, in a New Jersey bankruptcy court on Tuesday.
The fund differs from the additional $671 million in loans provided to FTX’s sister company Alameda Research.
BlockFi’s $355M Stuck on FTX
Revealing further details on the matter, attorney Sussberg said:
“In addition to the loan arrangement, and the $275 million that was drawn, BlockFi acted as a lender to Alameda, which is an FTX trading subsidiary, and they also had crypto on the FTX platform. Specifically, BlockFi had $671 million in outstanding loans that are defaulted to Alameda and $355 million in digital assets that, unfortunately, are now frozen on the FTX platform.”
BlockFi filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of New Jersey on Nov 28, after facing a liquidity crisis due to a “lack of clarity” over the status of FTX and Alameda – which both also filed for bankruptcy on Nov 11.
According to a court filing, BlockFi has more than 100,000 creditors with liabilities and assets between the range of $1 billion to $10 billion. BlockFi revealed in its bankruptcy filing that it has roughly $257.9 million in cash on hand to provide sufficient liquidity to continue certain business operations during its bankruptcy proceedings.
During his speech on Tuesday, Sussberg revealed that BlockFi would be filing a motion to allow customers holding their assets in the BlockFi Wallet product to withdraw their funds.
BlockFi Falls in FTX Aftershocks
Meanwhile, before finally filing for bankruptcy on November 28, BlockFi made a lifeline deal with one-time savior FTX several months ago to stabilize itself after one of its counterparties, Three Arrows Capital (3AC), fell into liquidation.
The deal included FTX giving a $400 million credit facility to BlockFi with an option to buy the lending platform for up to $240 Million. However, following FTX’s dramatic fall, the crypto lender’s hopes were dashed.
