BlockFi has filed for Chapter 11 bankruptcy, making the crypto lender backed by Peter Thiel’s venture capital firm the latest casualty of the fallout from the collapse of Sam Bankman-Fried’s FTX exchange.
The filing marks an unravelling several months in the making for New Jersey-based BlockFi, led by chief executive Zac Prince, which was valued at $4bn in a fundraising round last year. In July, it suffered losses on loans to the collapsed crypto hedge fund Three Arrows Capital, leading to a bailout this summer from Bankman-Fried. But FTX itself collapsed earlier this month, prompting BlockFi to pause lending and customer withdrawals.
Now the lender is the latest once high-flying crypto company to come crashing to earth as the collapse of Bankman-Fried’s crypto empire sends ripples through the digital assets industry.