BlockFi tells US bankruptcy court that it is “the antithesis of FTX.” We explain their allegations!
Lawyers for BlockFi, another victim of the FTX collapse, made their appearance in US bankruptcy court. Emphasizing that the United States crypto lender was “the antithesis of FTX.” And that you would seek to return customer funds as quickly as possible
“Earlier today, BlockFi’s first day Chapter 11 Hearing took place. We reiterate our singular focus: maximizing value for all customers and other stakeholders.”
Now, BlockFi said it owes money to more than 100,000 creditors. It listed FTX as its second-biggest creditor, with $275 million owed on a loan issued earlier this year. The largest creditor being AnkuraTrust, which is owed $729 million.
BlockFi suffers the contagion effect of the fall of FTX
To recall, BlockFi, based in New Jersey, United States, once exceeded 500 employees and a $3 billion valuation. And its bankruptcy, declared on November 28, is caused by the contagion effect created by FTX.
“We know our customer community has a lot of questions. We are focused on doing everything we can to be transparent in decisions related to our pause, products, and platform activity.”
We know that our client community has a lot of questions.— BlockFi (@BlockFi) November 23, 2022
We are focused on doing the utmost to be transparent around decisions related to our pause, products, and platform activity.
Here is an FAQ with the latest information:https://t.co/qkUTTHEopw
Is it really the antithesis?
Specifically, Joshua Sussberg, BlockFi’s lawyer, told the court in Trenton, New Jersey, that the company’s bankruptcy was due to its substantial exposure to FTX.
“BlockFi was shocked and dismayed to learn of FTX’s mismanagement.”
Notably, Sussberg went out of his way to distance BlockFi from FTX, saying that the company was not addressing the issues that apparently plagued FTX. Indicating, that BlockFi had mature and consistent leadership, hiring the right experts and implementing the right procedures and protocols.
“This is the antithesis of FTX. This is completely, 180 degrees, a different story.”
Incidentally, BlockFi has petitioned US bankruptcy judge Michael Kaplan for the authority to continue paying employees. Also, maintain bank accounts and other necessary measures to continue with your daily operations during your bankruptcy case.
They seek customers to withdraw their funds
Similarly, Joshua Sussberg noted that BlockFi also intends to seek a court ruling. That allows customers in the BlockFi Wallet program to withdraw their funds during the bankruptcy case, if they wish.
To which Sussberg stated: “We really intend, as we mentioned in the pleadings, to quickly make a request to allow customers to make withdrawals from their personal wallets to the extent that they wish. Since we believe that that is not owned by the company’s equity.”
In closing, Sussberg told the judge, Michael Kaplan, that he anticipates that the process to recover the BlockFi funds that are in FTX “will take a long period of time.”
I close with this phrase from Robert Kiyosaki:
There is a difference between being poor and being broke. Bankruptcy is temporary, poverty eternal.