BlockFi, once a top crypto lending platform and now in the midst of Chapter 11 bankruptcy proceedings, has posted a document that outlines its dramatic fall from grace. Once a leading digital asset unicorn, crypto contagion destroyed the platform, which is now looking to maximize value for its stakeholders.
BlockFi said that it expects to file both its Schedules of Assets and Liabilities and its Statement of Financial Affairs with the Court on January 11, 2023. As it is committed to returning as much value as possible, BlockFi said it was posting the presentation to provide “important historical background and context.”
BlockFi is committed to maximizing value for all clients and other stakeholders by moving forward in its chapter 11 cases expeditiously and transparently.
— BlockFi (@BlockFi) January 9, 2023
BlockFi launched in 2018 with its lending platform, generating higher and higher valuations with each successive funding round. In the summer of 2021, BlockFi raised capital at a valuation of $3.8 billion with expectations for a profitable future. 2022 turned out to be completely different. In February of 2022, BlockFi settled with the Securities and Exchange Commission regarding an enforcement action paying $100 million. The SEC had charged BlockFi with failing to register the offers and sales of its retail crypto lending product. BlockFi settled without admitting nor denying the claims. It was downhill from here.
The series of well-known crypto failures, like TerraUSD/LUNA, Celsius Network, 3 Arrows Capital, and Voyager Digital, caused BlockFi to pause redemptions. A deal with FTX ended up being a temporary victory.
The document provides information on the equity destruction of insiders and how they went from millionaires to dust.
On November 11, 2022, BlockFi filed for bankruptcy protection.