Yesterday BlockFi acknowledged significant exposure in the form not only of assets on the exchange, but also additional obligations owed to FTX, including an undrawn credit line from FTX. This despite earlier rumors that most of its assets were in FTX.
After FTX collapse, Crypto Contagion spreads
According to the latest reports, BlockFi Inc. appears to be in preparation for bankruptcy filings. The potential Chapter 11 filing of the ailing crypto lender follows a temporary halt to client withdrawals last Wednesday due to a “lackof clarity” about Sam Bankman-Fried’s FTX empire.
Read more: This Hedge Fund loses a majority of funds due to FTX Bankruptcy
Ironically, FTX had planned to buy BlockFi for up to $240m in July, depending upon the startup’s performance. There was a catch to the potential acquisition. BlockFi had a $400m revolving credit line to keep it afloat during the financial crisis.
What Caused FTX to File Bankruptcy
Binance signed a letter on Tuesday to acquire FTX, in what appeared to be a bailout for the troubled exchange. After Binance’s thorough research on FTX, the plan fell apart less than 24 hours later.
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Read More: John Ray III Joins FTX as New CEO
In less than a week, the renowned crypto exchange, once a leader within its field, has been smashed to pieces. Many other organizations are also expected to fall with it.

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