Shortly after the FTX bankruptcy: Crypto bank BlockFi is also insolvent

After the spectacular collapse of the cryptocurrency exchange FTX, the US bank BlockFi, which specializes in virtual means of payment, is now also filing for bankruptcy.

Shortly after the FTX bankruptcy: Crypto bank BlockFi is also insolvent

After the spectacular collapse of the cryptocurrency exchange FTX, the US bank BlockFi, which specializes in virtual means of payment, is now also filing for bankruptcy. The bankruptcy of FTX had already shaken the crypto world badly.

After the bankruptcy of the crypto currency platform FTX, the crypto lender BlockFi also filed for bankruptcy in the USA. The move is intended to enable a "comprehensive restructuring that maximizes value for all customers and other stakeholders," BlockFi said. The digital currency lender says it wants to focus on getting back money owed to it.

The company, which was founded in 2017, got into trouble this year due to price losses in cryptocurrencies. FTX then offered BlockFi a $400 million loan over the summer to keep it from going bankrupt. Two and a half weeks ago, however, FTX itself filed for bankruptcy. As a result, BlockFi had to temporarily suspend most of its activities. The bankruptcy of FTX had shaken the crypto world badly and caused the price of several digital currencies such as Bitcoin to collapse.

In the meantime, more and more details are becoming known about the questionable financial behavior of FTX founder Sam Bankman-Fried, who has long been celebrated as a crypto prodigy. In a court document, newly installed FTX chief John Ray denounced inadequate oversight, missing or untrustworthy financial records and "possibly compromised" corporate governance. The Alameda Research investment fund, also founded by Bankman-Fried, had invested in cryptocurrencies issued by FTX in the course of dubious financial transactions.

The FTX bankruptcy is now also calling politics into action. The US House of Representatives is planning a hearing on the issue. In addition to Bankman-Fried, representatives of competitors such as Binance should also be heard. Alarm bells are also ringing in Europe. According to ECB Council member Pablo Hernandez de Cos, the collapse of the crypto exchange FTX shows the dangers associated with such cryptocurrencies. "We hope that the recent events will make citizens more aware of the risks associated with these crypto assets," said the European Central Bank (ECB) Governing Council member.