Cryptocurrency lender BlockFi Inc. is preparing a potential bankruptcy filing after halting withdrawals of customer deposits and acknowledging it has “significant exposure” to bankrupt exchange FTX, people familiar with the matter said.
BlockFi paused withdrawals and limited activity on its platform last week, saying it couldn’t operate business as usual given the uncertainty about FTX. BlockFi is now planning to lay off some of its workers while the troubled firm prepares for a possible chapter 11 itself, people familiar with the matter said.
BlockFi didn’t respond to requests for comment. A bankruptcy filing would make Jersey City, N.J.-based BlockFi the latest casualty of the sudden collapse of Sam Bankman -Fried’s crypto empire, which comprises FTX, FTX US, trading firm Alameda Research and more than 100 affiliated entities.