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Crypto lender BlockFi files for bankruptcy protection

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Representations of cryptocurrencies plunge into water in this illustration taken, May 23, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

U.S. cryptocurrency lender BlockFi said on Monday it had filed for Chapter 11 bankruptcy protection along with eight of its affiliates, in the latest casualty since FTX collapsed earlier this month triggering instability in the crypto market.

New Jersey-based BlockFi had earlier paused withdrawals from its platform and acknowledged it had “significant exposure” to FTX, and its associated entities.

The move comes more than a week after FTX filed for U.S. bankruptcy protection and its founder Sam Bankman-Fried resigned as chief executive.

In July, FTX had signed a deal with BlockFi to provide the firm with a $400 million revolving credit facility and an option to buy it for up to $240 million.

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