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BlockFi Facing Insolvency

After the bankruptcy of FTX, BlockFi is also facing bankruptcy. Payouts were already stopped last week.

The bankruptcy of crypto exchange FTX has sent shockwaves throughout the crypto industry and put many digital currencies under pressure. The industry is now concerned that other crypto exchanges could suffer the same fate. That includes crypto lending service BlockFi. The company gained popularity as a crypto exchange that lured investors with loans and deposits at low interest rates. The exchange, however, already came under heavy pressure in the wake of the collapse of algorithmic stablecoin Terra and the resulting crash of other cryptocurrencies.

On Monday, BlockFi employees were informed of the severity of the situation at a shareholder meeting, although layoffs were not explicitly mentioned, the WSJ source said. In an email sent to customers on Monday, the company mentioned that it had “hired outside experts as advisors” to “organize BlockFi’s next steps.”

The WSJ also revealed that BlockFi has been in talks with Binance about possible financial support.

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