The Wall Street Journal: BlockFi may seek bankruptcy protection, plans layoffs, continues withdrawal suspensions

According to sources cited by The Wall Street Journal, cryptocurrency lending company BlockFi is reportedly preparing for a potential Chapter 11 bankruptcy protection filing. Sources claim that the company is also planning layoffs. BlockFi previously acknowledged significant risk exposure to FTX and its affiliated entities and will continue to suspend withdrawals.

According to The Wall Street Journal, citing sources familiar with the matter, cryptocurrency lending company BlockFi is preparing for a potential Chapter 11 bankruptcy filing. The sources claim that the company also plans to lay off employees. BlockFi previously acknowledged significant risk exposure to FTX and its affiliated entities and will continue to suspend withdrawals.

Earlier this year, BlockFi signed a credit agreement with FTX US that gave FTX the right to acquire it. Sources revealed that the sole condition for FTX to rescue BlockFi was to have BlockFi's funds custodied to FTX. Additionally, the California Department of Financial Protection and Innovation suspended BlockFi's lending license on Friday, which will continue for at least 30 days.

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