BlockFi Sues Bankman-Fried Entity to Recover Collateral After Bankruptcy
Text, in yellow, announcing cryptocurrency lender BlockFi’s bankruptcy filing appears on the company website on a smart phone on Monday, Nov. 28, 2022, in New York. BlockFi said that it was filing for bankruptcy protection to stabilize its business and give it the chance to perform a restructuring.
WASHINGTON (Sputnik) – Cryptocurrency firm BlockFi is suing an entity tied to the head of fellow cryptocurrency player FTX, Sam Bankman-Fried, in an attempt to recover collateral the company says it is owed, according to a court document filed in the US Bankruptcy Court for the District of New Jersey.BlockFi filed a suit against Bankman-Fried’s Emergent Fidelity Technologies demanding he give them an unspecified amount of collateral they claim belong to the company.The suit seeks an order from the court directing Emergent to immediately transfer the collateral to a neutral party, and ultimately BlockFi, the filing said.The filing came hours after the crypto lender followed in FTX’s steps and filed for bankruptcy after the recent collapse of cryptocurrency prices. The Chapter 11 filing effectively gives BlockFi creditors assurances it will have a better chance to arrange a repayment plan.Reports have indicated that BlockFi’s top 10 creditors are owed some $1.2 billion.
AmericasInvestors Unlikely to See Returns From FTX Bankruptcy as Gov May Move to Regulate Crypto Exchanges11 November, 23:56 GMTEarlier this month, Bankman-Fried’s cryptocurrency business filed for bankruptcy after competitor Binance backed out of plans to acquire it.Neither individual nor institutional investors are expected to get anything back from FTX’s bankruptcy proceedings, Gary Korolev, CEO of financial services firm Sovereign Wealth Management, told Sputnik.
