This article comes fromDecryptsecondary title

Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- BlockFi has hired a consultant to study a possible Chapter 11 bankruptcy filing, sources said. The company has turned to Binance for help and is considering possible layoffs.

Crypto lending platform BlockFi is considering filing for Chapter 11 bankruptcy protection and preparing to lay off staff following the collapse of closely-linked cryptocurrency exchange FTX, a source at crypto lending platform BlockFi told Decrypt on Tuesday. The Wall Street Journal firstto reportto report

The company may file for bankruptcy.

BlockFi is also in talks with Binance regarding possible funding assistance as it explores next steps.

BlockFi suspended customer withdrawals last Thursday night, and on Mondayreiteratereiterate

It will continue to suspend withdrawals and limit withdrawal activity, while acknowledging that the company has "significant exposure to FTX," limiting its ability to operate normally.

“Rumors that the majority of BlockFi’s assets are held in FTX are untrue,” BlockFi wrote in a letter to clients on Monday. “That said, we do have significant exposure to FTX and related corporate entities, including Alameda’s our debts, assets held at FTX.com, and undrawn amounts on our line of credit with FTX US. While we will continue to work diligently to recover all debts, due to the ongoing bankruptcy proceedings at FTX, debt recovery is expected will be postponed. BlockFi withdrawals will remain suspended while customers are reminded not to make deposits to BlockFi wallets or interest accounts.”BlockFi this summerAccepted $400 million line of credit from FTX US

. With the collapse of Terra and the trough in the cryptocurrency market, BlockFi, facing its own struggles, sought out this line of credit.In an all-hands meeting on Monday, BlockFi employees were warned of the seriousness of the company's current situation, but layoffs were not explicitly mentioned, the sources said. The company conducted in Julyvoluntary buyout

, but still has more than 300 full-time employees. Decrypt has learned that BlockFi still has enough liquidity to quietly begin processing customer withdrawals prior to last Thursday night’s freeze.

At the end of Monday’s email to clients, the firm mentions that it has “hired outside expert counsel to help us guide BlockFi’s next steps. Haynes and Boone (law firm) will continue to serve as our lead outside counsel, BRG will act as our financial advisor," said Berkeley Research Group, or BRG, a restructuring firm frequently involved in bankruptcy proceedings.

News on November 9th, BlockFi founder Flori MarquezTweetTweet

Shortly thereafter, however, BlockFiAnnounceAnnounceWithdrawals will be suspended and customers are asked not to make deposits with BlockFi Wallet and Interest Accounts at this time.source said

The bad consequences don’t stop there, the California Department of Financial Protection and Innovation (DFPI)AnnounceAnnounce

, will suspend the license of cryptocurrency lending platform BlockFi in the state for 30 days, pending an investigation into the company's announcement that it stopped providing loans and customer withdrawals after the FTX incident.

DFPI said, “DFPI is investigating BlockFi’s compliance with laws within the Commissioner’s jurisdiction, including the California Financial Code. DFPI is also investigating FTX.”

As of last Friday, FTX had filed for Chapter 11 bankruptcy protection, and SBF had resigned as CEO. FTX was accused of misusing client funds to cover Alameda's multi-billion dollar trading losses.According to The Block statisticsshow