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BlockFi Files for Bankruptcy as FTX Fallout Spreads

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BlockFi, a cryptocurrency lender and financial services firm, filed for bankruptcy on Monday, becoming the latest company in the crypto industry hobbled by the implosion of the embattled exchange FTX.BlockFi had been reeling since the spring, when the collapse of several influential crypto firms pushed the market into a panic, sending the value of cryptocurrencies like Bitcoin plunging. In June, FTX agreed to provide the company with a $400 million credit line, which BlockFi’s chief executive, Zac Prince, said would provide “access to capital that further bolsters our balance sheet.” The deal also gave FTX the option to buy BlockFi.But that agreement meant that BlockFi was financially entangled with FTX, and its stability was thrust into uncertainty this month after a series of revelations about corporate missteps and suspicious management at FTX. A few days after the exchange collapsed, BlockFi suspended withdrawals, explaining that it had “significant exposure” to FTX, including undrawn amounts from the credit line and assets held on the FTX platform. BlockFi is not the first crypto lender to collapse in a devastating year for the industry. After the spring crash, in which Bitcoin fell 20 percent in a week, two other lenders, Celsius Network and Voyager Digital, filed for bankruptcy.BlockFi, which is based in Jersey City, N.J., was created in 2017 and, as of last year, claimed more than 450,000 retail clients who can obtain loans in minutes, without credit checks. “We are just at the …

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