Key Point
- Selling the business at this point will not generate enough value for creditors, BlockFi noted.
BlockFi has announced that it is shutting down its lending platform after going bankrupt and hawking its business on the streets like a door-to-door salesman, the regulatory crackdown in the US seems to have spurred investors to stay away from many crypto-related businesses.
BlockFi to Liquidate Lending Platform
It seems there are no better alternatives for the bankrupt crypto lender to save its clients other than to dissolve the lending business.
According to a Monday report by Wall Street Journal, the bankrupt crypto lender has announced a move to liquidate its crypto lending business.
As per the report, BlockFi has explored other alternatives like selling the business, but the company said at this time, selling the business will not “generate enough value for its creditors.”
Meanwhile, the outcome of FTX and Alameda Research, Three Arrows Capital, and Core Scientific court cases will determine the recoverable amount by clients.
The crypto lender BlockFi launched its lending business in 2017, and since then, it has raised quite a lot of funds from notable companies like Galaxy Digital.
In 2021, BlockFi ran into trouble with regulators after getting caught that its interest accounts were unregistered securities, and paid $100 million to settle the case with the SEC, adding salt to BlockFi’s injury is the collapse of the FTX exchange in November last year, prompting the lender to file for creditors protection in the same month.
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