Due to its “substantial exposure” to the insolvent FTX, BlockFi is getting ready to perhaps file for bankruptcy, according to the WSJ.
BlockFi yesterday acknowledged considerable exposure in the form of not just assets on deposit with the exchange but also additional obligations owed to BlockFi by FTX as well as an undrawn line of credit from FTX, despite refuting rumors that the majority of its assets were kept at the exchange.
BlockFi intends to fire employees as meeting wage bill becomes impossible despite efforts being put in place for the company to strive.
Last Monday, BlockFi issued a message to indicate that due to the uncertainty surrounding FTX, FTX US, and Alameda, it is unable to conduct business as usual.
It stated in a statement on Monday that it “is working round-the-clock to obtain the best outcome given the circumstances of last week.” However, they have “significant exposure to FTX and associated corporate entities, which encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US.” The company also debunked rumors that “a majority of BlockFi assets are custodied at FTX.”
