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BlockFi Granted Extension to Submit Bankruptcy Exit Plan

by Blockchain NewsApril 22, 2023

BlockFi, a leading lender of digital assets, filed for bankruptcy in November 2022, and has been granted an extension until May 15 to submit an exit plan, according to a New Jersey bankruptcy judge. The crypto firm is exploring a potential sale of company assets or the possibility of getting an outside backer to support a restructuring deal, as per the company’s lawyer Joshua Sussberg.

The bankruptcy code requires debtors to propose a Chapter 11 plan within the first 120 days of filing, which meant that BlockFi was required to present a plan by March 27. However, on March 21, the company filed a request to prolong the deadline for its Chapter 11 plan by 90 days to June 26. The company’s lawyers argued that “much work remains” due to the scale and complexity of the Chapter 11 cases. Judge Michael Kaplan, the bankruptcy judge handling the case, deemed it worthwhile to extend the deadline to ensure the smooth continuation of the case, albeit a shorter extension than the one requested by BlockFi.

The company is estimated to owe up to $10 billion to over 100,000 creditors. A committee of BlockFi customers argued they should be allowed to take control of the bankruptcy case so that cryptocurrency held on the platform can be returned to creditors immediately. Committee lawyer Robert Stark told Kaplan that BlockFi creditors aren’t sophisticated lenders, but individual mom-and-pop retail customers, “many of whom have lost their life savings.” The committee cited the lack of a workable business for reorganization and the potential sale of the platform, which Stark referred to as a “bundle of sticks.”

Although Kaplan rejected the committee’s appeal, he granted an extension that was “modest” according to Sussberg, who stated that the company would have a plan ready for unsecured creditors to evaluate within two weeks. The crypto firm’s lawyers have indicated that they are exploring all possible avenues, including a sale of assets, to emerge from bankruptcy as a more robust entity.

BlockFi’s financial woes stem from the company’s controversial decision to offer high-yield accounts backed by cryptocurrencies like Bitcoin and Ethereum. However, the firm’s aggressive growth strategy was met with regulatory scrutiny, with several states such as New Jersey, Alabama, and Texas ordering the company to cease operations in their jurisdictions.

In January 2022, the US Securities and Exchange Commission (SEC) issued a cease-and-desist order against BlockFi, alleging that the firm’s interest accounts were unregistered securities. The SEC’s lawsuit is ongoing, with BlockFi seeking to have the case dismissed.

In conclusion, the extension granted to BlockFi provides the company with additional time to devise a plan to emerge from bankruptcy as a viable entity. However, the company faces several challenges, including regulatory scrutiny, legal battles, and the loss of customer confidence. Only time will tell whether BlockFi can overcome these hurdles and regain its position as a leading player in the cryptocurrency lending space.

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Bhutan Sovereign Investment Fund Invests Millions in Crypto

by Blockchain NewsApril 17, 2023

The Kingdom of Bhutan’s sovereign investment arm, Druk Holding and Investments (DHI), has quietly built up a crypto portfolio worth millions of dollars without disclosing it to the public. DHI is a commercial arm of the royal government of Bhutan and is estimated to manage around $2.9 billion in assets.

According to a report released by Forbes, DHI’s crypto investments were brought to light following the crypto contagion in 2022 when companies like Celsius and BlockFi filed for bankruptcy. A Celsius filing showed that DHI withdrew over $65 million and deposited almost $18 million in crypto.

BlockFi lawyers filed a complaint against DHI to reclaim outstanding assets, alleging that the fund defaulted on its $30 million loan in March. BlockFi claimed that DHI refused to repay the loan in full after liquidating the 1,888 Bitcoin (BTC) collateral, worth $76.5 million at the time.

DHI CEO Ujjwal Deep Dahal said in a statement to Forbes that the issue with BlockFi is confidential and highlighted that the “matter with BlockFi has been settled.” However, the exact terms of the settlement were not disclosed.

Celsius and BlockFi were two of the most prominent bankruptcy filings within the crypto space in 2022. On July 14, crypto lending platform Celsius filed for Chapter 11 reorganization, also known as a bankruptcy filing. Since then, the embattled crypto lender has been dealing with bankruptcy proceedings and is working on a restructuring plan. On Nov. 28, BlockFi also filed for bankruptcy after being affected by the infamous collapse of the FTX exchange.

Bhutan is a small landlocked country in South Asia, located in the eastern Himalayas. The country is known for its Gross National Happiness index, which measures the well-being of its citizens instead of just economic growth. Bhutan has been gradually opening up to the world in recent years, with a focus on sustainable development and environmentally friendly policies.

The news of Bhutan’s crypto investments is a reminder of the increasing interest in cryptocurrencies among governments and institutional investors. While many countries have been skeptical of cryptocurrencies and have implemented strict regulations, others have embraced them as a way to diversify their portfolios and hedge against inflation.

In recent years, countries like China, Russia, and Iran have explored the use of cryptocurrencies for international trade, while other countries like El Salvador and Ukraine have adopted Bitcoin as legal tender. The growing interest in cryptocurrencies from governments and institutional investors is expected to continue in the coming years, as the crypto market matures and becomes more mainstream.

In conclusion, Bhutan’s sovereign investment fund’s decision to invest millions in cryptocurrencies highlights the increasing interest in digital assets among governments and institutional investors. While the exact size and composition of DHI’s crypto portfolio remain undisclosed, the news is a reminder of the growing importance of cryptocurrencies in the global financial system. As the crypto market continues to evolve and mature, it is likely that more countries and institutional investors will follow Bhutan’s lead and invest in digital assets.

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Tagged : Bhutan / Blockfi / Celsius / Crypto Portfolio / News / SOVEREIGN INVESTMENT

Defunct Crypto Lender BlockFi Has $227 Million in Uninsured Funds with Troubled Silicon Valley Bank

by Blockchain NewsMarch 11, 2023

Air pollution is a significant public health concern worldwide, and recent studies have found high levels of air pollution in major cities around the world. The issue is particularly prevalent in developing countries, where industrialization and urbanization have led to increased emissions from transportation and manufacturing.

One sector that has emerged in response to this problem is the clean energy industry, which seeks to reduce emissions and promote sustainability. Clean energy encompasses a range of technologies, including renewable energy sources like solar and wind power, as well as energy-efficient products and services.

Despite the growth of the clean energy industry, however, air pollution remains a major challenge in many parts of the world. In particular, major cities are often hotspots for pollution, due to factors like high population density, heavy traffic, and industrial activity.

One company that has been impacted by this issue is BlockFi, a defunct crypto lender that has $227 million in uninsured funds allocated to a money market mutual fund (MMMF) offered by Silicon Valley Bank (SVB). SVB was shut down by the California Department of Financial Protection and Innovation on March 10, with no specifics offered at the time of the closure.

The funds in question are not FDIC-insured, not insured by any federal government agency, and “not guaranteed by the bank.” While investors are issued fund shares in exchange for their capital, the risk to BlockFi in this instance is most likely the fund’s performance, rather than anything related to SVB’s financial woes.

The recent Silvergate bankruptcy has also impacted the crypto market, causing prices to tumble since the crypto-friendly bank’s financial woes came to light at the beginning of March. One firm that has been directly impacted by the SVB closure and the Silvergate bankruptcy is USD Coin (USDC) issuer Circle.

As of January 31, $8.6 billion, or roughly 20% of Circle’s reserves, were held in several U.S. financial institutions, including SVB, Silvergate Bank, and Bank of New York Mellon. While the exact value held in SVB and Silvergate is unclear, Circle has stated that it and USDC will continue to “operate normally” as it awaits “clarity on how the FDIC receivership of SVB will impact its depositors.”

Overall, the issue of air pollution in major cities and the ongoing challenges faced by the clean energy industry highlight the need for continued innovation and investment in sustainable technologies. As for the impact of the SVB closure and the Silvergate bankruptcy on the crypto market, it remains to be seen how these developments will play out in the coming weeks and months.

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Tagged : Blockfi / Fdic / MONEY MARKET MUTUAL FUND / News / SILICON VALLEY BANK / UNINSURED FUNDS

BlockFi Will Submit Assets And Liabilities For Bankruptcy On January 11

by Blockchain NewsJanuary 10, 2023

In a recent announcement, the cryptocurrency lending company BlockFi stated that it will provide information regarding its assets and liabilities, in addition to the payments that it received prior to its bankruptcy filing in November.

BlockFi stated that it had provided its stakeholders with a presentation in which it detailed its intentions for future court filings and provided a breakdown of the bankruptcy proceedings. BlockFi also provided a breakdown of the bankruptcy proceedings.

The lending company claims that shortly after the company’s initial bankruptcy hearing in November, it made contact with 106 potential buyers. On January 30, the company will ask the court for permission to proceed with the bidding process and will ask for approval from the court regarding the bidding process. Both of these requests will be made in relation to the bidding process.

To be more specific, the company stated that no members of the BlockFi management team had withdrawn any cryptocurrency from the platform since October 14 and that none of them had “made a withdrawal bigger than 0.2 BTC in value at any time” since August 17. This information was provided in a blog post that was published on the company’s website.

In addition, the company stated that following the acquisition of a revolving credit line for $400 million from FTX US in July, it had increased basic wages and paid retention incentives for specific personnel.

On January 11, BlockFi announced that it planned to provide a summary of its financial affairs, in addition to providing an account of its assets and liabilities.

The announcement was made after the United States Department of Justice informed the judge overseeing the bankruptcy of BlockFi that it had seized more than 55 million shares of Robinhood. At the time of publication, these shares had a value of approximately $450 million. The criminal case against the cryptocurrency exchange FTX and the executives of the company resulted in the seizure of the shares.

The next scheduled meeting for the public hearing regarding the FTX bankruptcy case is scheduled for the 11th of January. On the other hand, an all-encompassing hearing for BlockFi is scheduled for the 17th of January.

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Tagged : Bankruptcy / Blockfi / Department Of Justice / News / Robinhood

Investors Sell FTX, Celsius, BlockFi, Voyager

by Blockchain NewsJanuary 4, 2023

Some investors who hold claims on FTX, Celsius Network, BlockFi, and Voyager Digital are attempting to sell such rights to other parties so that they don’t have to wait for the lengthy bankruptcy process that these companies will have to go through. This is done so that the investors don’t have to wait for the companies to be forced to file for bankruptcy.

There are at least hundreds of investors who have been negatively impacted by the recent failures of cryptocurrency platforms FTX, Celsius, BlockFi, and Voyager and do not wish to wait for a drawn-out bankruptcy process that does not guarantee that they will even be able to get anything back, according to the information that was provided by the startup company Xclaim, which specializes in the trading of cryptocurrency claims. Xclaim is a company that specializes in cryptocurrency claims trading.

In spite of the possibility that they would incur some financial losses as a direct result of this transaction, the investors have decided to put their claims up for auction in the hope of turning a profit of some sort from the current predicament.

There were over 10,000 claims that had been posted, with 9,072 claims having been posted on Celsius Network, 93 claims having been posted on Voyager, 67 claims having been posted on FTX, and 23 claims having been put on BlockFi.

Matt Sedigh, the man who founded Xclaim, recently gave an interview to the Wall Street Journal in which he stated that his company has been taking calls from creditors located all over the world.

According to the executive, two thirds of the claims that were submitted came from creditors located in China, Hong Kong, and Taiwan, respectively.

It has come to the attention of certain debt investors and hedge funds that they may be interested in purchasing claims.

There have been a number of companies, including Contrarian Capital Management, Invictus Global Management, and NovaWulf Digital Management, that have acquired parts of the claims.

During this period, Celsius is making preparations to introduce a motion that will extend the deadline for users to submit their claims. This motion will allow for more time for consumers to submit their claims.

According to recent allegations, former FTX CEO Sam Bankman-Fried is believed to have cashed out a total of $684,000 in the time after he was released on bond.

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Tagged : Blockfi / Celsius / FTX / News / Voyager / XCLAIM

BlockFi Petitions To Restore Wallet Users’ Frozen Crypto

by Blockchain NewsDecember 20, 2022

The cryptocurrency lending platform BlockFi has submitted a request to a bankruptcy court in the United States for permission to recover customers’ crypto assets that were stored in BlockFi wallets.

The defunct cryptocurrency lending platform BlockFi has submitted a petition to a bankruptcy court in the United States, demanding permission to enable its customers to withdraw digital assets that are now stored in wallets provided by BlockFi.

The lender sought the court for power to recognize customer withdrawals from wallet accounts that have been blocked on the platform since November 10. The application was filed on December 19 with the United States Bankruptcy Court for the District of New Jersey.

Additionally, authorization is requested in the court proceedings to update the user interface in order to accurately represent transactions since the stoppage in platform operations.

BlockFi referred to the move as a “essential step toward our aim of recovering funds to customers via our chapter 11 proceedings” in an email that was addressed to users who were impacted and extensively circulated.

According to BlockFi, the stop that has been placed on the processing of withdrawals and transfers from BlockFi Interest Accounts will not be lifted as a result of this action.

The online lending platform has also made it clear that it intends to seek similar remedies from the Supreme Court of Bermuda in relation to BlockFi Wallet Accounts that are stored at BlockFi International Ltd.

According to the paperwork filed with the court, there will be a hearing on January 9 to determine whether or not the application will be granted.

On January 13, the Supreme Court of Bermuda is going to hold a separate hearing on wallet accounts that are maintained at BlockFi International Ltd.

On November 11, BlockFi recommended that customers refrain from depositing funds into their BlockFi wallets or Interest Accounts, citing a lack of clarity on FTX as the reason for the request.

On November 28th, BlockFi submitted their application for Chapter 11 bankruptcy, which included all eight of its companies.

On the very same day, a petition for bankruptcy was submitted to the Supreme Court of Bermuda by BlockFi International.

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Tagged : Bankruptcy / Blockfi / CRYPTO LENDER / News

Jump Crypto denies closing due to FTX losses

by Blockchain NewsNovember 18, 2022

The cryptocurrency division of the Jump Trading Group, known as Jump Crypto, has debunked rumors circulating on the internet that it could shut down as a result of FTX losses.

On November 17, the business said in a tweet that “Jump Crypto will not collapse. We believe that we are one of the crypto businesses that is both well-funded and highly liquid in the current market. Please take into consideration that I continue to engage in “investing and trading.”

On November 12, the firm that deals in cryptocurrencies tweeted that it was surprised by the events surrounding FTX, but it informed its customers that “exposure to FTX was managed according to our risk plan and we remain well financed.”

In spite of assurances made by Jump Crypto to the contrary, the cryptocurrency community continues to exercise extreme caution in the wake of the collapse of FTX and the ensuing repercussions of this event. Knower, a market expert, made the following statement in a tweet: “Jump crypto will genuinely tweet claiming they’re okay and not shutting down, but 157 reply guys and threadooooors will argue that they’re lying (because SBF stated the same thing).”

There seems to be less trust in the cryptocurrency community as a result of recent events, including the collapse of FTX and the events that followed. Sam “SBF” Bankman-Fried, who served as the CEO of FTX before the company declared bankruptcy, disputed that the “shitshow” that was FTX had any financial effect on FTX US before FTX went bankrupt. Previously, Bankman-Fried held to the position that “any user may completely withdraw (subject to petrol expenditures, etc.)” from FTX US. It became immediately apparent that this was not the case as soon as FTX Group, including FTX US, filed for Chapter 11 bankruptcy protection.

Following the collapse of FTX, BlockFi found itself in a similar circumstance and at first denied rumors of financial difficulties.

A few days after assuring customers that all BlockFi products were “totally functioning,” founder and COO Flori Marquez allegedly said that the company was on the verge of filing for bankruptcy due to reports that the majority of its assets were kept on the defunct FTX market. This statement comes after Marquez had previously assured customers that all BlockFi products were “totally functioning.”

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Tagged : Blockfi / FTX / Jump Crypto / News

BlockFi Suspends Withdrawals Following FTX Crisis

by Blockchain NewsNovember 11, 2022

Crypto lender BlockFi has suspended business following the collapse of crypto exchange FTX.

The company announced on Twitter that they have suspended withdrawals and normal business operations due to the lack of clarity around the current status of FTX.

“We are shocked and dismayed by the news regarding FTX and Alameda,” BlockFi said late Thursday on its Twitter account, becoming the latest casualty of the sudden fall of Sam Bankman-Fried’s FTX. Alameda Research is an affiliated trading firm also controlled by Bankman-Fried.

BlockFi, which is currently caught in a financial conundrum, was once worth $3 million.

The company took to Twitter to announce that platform activity will be limited for the time being and withdrawals for clients will be suspended “as is allowed under our terms.”

BlockFi has not announced any exact time frame for service restoration.

However, the crypto lender announced through Twitter that ACH deposits and “wire transactions scheduled for 11/11 will not process until 11/14.”

In July, the embattled crypto lender suffered a liquidity crisis after steep declines in crypto prices, which engulfed many lenders.

The crypto lender had brokered a $680 million deal with FTX.US, which included a $400 million revolving credit facility and an option for FTX to buy BlockFi.

While in June, the crypto lender had sought to raise money at a reduced valuation of about $1 billion, a $2 billion decrease from its original valuation of $3 billion in March 2021.

Crypto lenders have had a bad year due to the crypto market downturn. Additionally, the collapse of the TerraUSD stablecoin in May was a catalyst that caused the domino effect. It led to the implosion of other crypto lenders such as Celsius Networks and hedge fund Three Arrows Capital.

BlockFi suffered an $80 million hit from the bad debt of Three Arrows.

FTX has witnessed a sudden collapse this week after the crypto exchange was swamped by client withdrawal requests over the weekend.

According to The Wall Street Journal, FTX’s financial crisis has driven the company into near insolvency as it had lent billions of dollars in customer assets to fund risky trading bets by Alameda. It set the scene for FTX’s implosion.

Furthermore, the downfall of FTX has also affected other major crypto firms, such as Crypto.com, who has suspended deposits and withdrawals of two stablecoins, USDC and USDT, on the Solana blockchain on Wednesday.

Bankman-Fried has informed investors that the crypto exchange would need to file for bankruptcy if it fails to procure a cash injection, according to Bloomberg, who received this information from a person with direct knowledge of the matter.

Bankman-Fried – who was once worth $26 billion – also informed them that his crypto exchange faces a shortfall of up to $8 billion and is in need of $4 billion to remain solvent.

Bankman-Fried, until recently, had been buying up crypto firms struggling due to a credit crunch caused by the sudden collapse of the cryptocurrencies Luna and UST or TerraUSD.

FTX is now on a mission to raise rescue financing in the form of debt, equity or a combination of both, the person familiar with the matter informed Bloomberg.

Image source: Shutterstock

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Tagged : Blockchain / Blockfi / Crypto / FTX / News / USDD / USDT

69 % Female Crypto Investors in U.S. Adopt Holding Strategy, Survey Shows

by Blockchain NewsOctober 25, 2022

Female Americans continue to be resilient as cryptocurrency owners, despite the broad market turmoil being experienced, according to a survey by global crypto financial services company BlockFi.

Through the latest edition of the Real Talk survey, BlockFi suggested that female crypto investors on American soil had a long-term outlook because they had adopted the buy-and-hold strategy. Per the report:

“When asked specifically what best describes their crypto investment style, the majority of female crypto owners (69%) said they hold crypto and remain hold-only.”

Flori Marquez, BlockFi’s founder and COO, added:

“The crypto landscape and the number of players look completely different than it did six months ago when we last issued this survey and yet the faith in the crypto markets and its potential as a long-term investment strategy remains. This resiliency is extremely promising.”

On the other hand, interest in this asset class has also not significantly decreased among female Americans. BlockFi noted:

“More than one in five women (22%) still intend to buy crypto in the next 12 months, down slightly from 28% the year prior.”

Some of the reasons why female investors in America are attracted to cryptocurrencies is because they believe it’s an inflationary hedge. Per the survey:

“When asked, one in five women believe crypto to be a good hedge against inflation. Even more, 20% of Gen Z women noted Bitcoin as the best long-term investment when presented with a list of options including individual stocks and real estate.”

Nevertheless, the study revealed a generational gap because one in ten women on American soil chose crypto as their first investment.

Meanwhile, an Ipsos survey showed that the intention of investing in cryptocurrencies or using them as a payment option was higher among Americans compared to Canadians, Blockchain.News reported.

Image source: Shutterstock

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Tagged : America / Blockfi / Cryptocurrency / FEMALE / Investors / Research / United States / Women in Blockchain

FTX Derivatives Exchange Revenue Tops $1B in 2021, Report said

by Blockchain NewsAugust 22, 2022

The financial record of FTX Derivatives Exchange for the 2021 financial year has shown that the company’s revenue topped the $1 billion mark, according to leaked earnings documents seen by CNBC.

The trading platform, founded in 2019 by Sam Bankman-Fried, has grown amongst the ranks and now stands as one of the most positive cash flow exchanges.

According to the leaked documents, FTX’s revenue grew from $89 million to $1.02 billion in 2021, which stands at 1,000% growth. As revealed, the firm’s operating income was $272 million, up from $14 million in the year-ago period. The trading platform also saw a net income of $388 million last year, up from just $17 million a year earlier.

The growth recorded across the board reflected the boom the digital currency ecosystem recorded in 2021, with Bitcoin (BTC) attaining its all-time high (ATH) price above $69,000.

FTX was well positioned for the impressive figures it recorded and has continued with the same momentum as last year. The company recorded $270 million in revenue in the first quarter of this year, and by projections, it is on track to earn as much as $1.1 billion this year. The emergence of the crypto winter in the second quarter did not really affect FTX but has rather positioned the trading platform as the lender of last resort.

With many established crypto firms going bankrupt following the collapse of Terra (LUNA), many have leaned on FTX for a bailout. The exchange has extended financial support to crypto lender BlockFi. While it also made a move in conjunction with Bankman-Fried’s Alameda Research, Voyager Digital rejected its offer noting it was not in the best interest of all parties involved.

Besides its role as a lender of last resort, the performance of FTX was also bolstered by its many acquisitions spanning every aspect of the industry. With investors’ backing, FTX seeks to continually bolster its global footprint across the board.

Image source: Shutterstock

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Tagged : Blockfi / Exchanges / FTX DERIVATIVES EXCHANGE / Sam Bankman-Fried