On Nov. 28, crypto lender BlockFi filed for chapter 11 bankruptcy protection in a New Jersey court, as the collapse of FTX brings down one more company in the industry.

BlockFi is the latest casualty in crypto this year, and it joins Three Arrows Capital, Voyager Digital, Celsius, and FTX on the list of crypto companies going through bankruptcy proceedings, among many others. 

Founded by Zac Prince and Flori Marquez, BlockFi had experienced exponential growth since its inception in 2017 and was backed by giants such as Valar Ventures, Galaxy Digital, Akuna Capital, SoFi, and Coinbase Ventures.  In March 2021, the company raised $350 million at a $3 billion valuation in a Series D funding round, and there were even talks about the firm going public.

In the announcement, the company said it will “focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities.” It also said that it has $256.9 million in cash on hand, which will be used to cover operational costs during the restructuring process.

According to the company’s petition, it has over 100,000 creditors, with both assets and liabilities between $1 billion and $10 billion.

Among the crypto lender’s largest creditors are Ankura Trust Company, which holds unsecured claims worth $729 million, and Sam Bankman-Fried’s bankrupt FTX US, which has a $275 million unsecured claim. Additionally, the firm owes the Securities and Exchange Commission $30 million due to a settlement agreement for failing to properly register its crypto lending product. In total, the company has $1.3 billion in unsecured claims, with $250 million being customer deposits. 

BlockFi started suffering the effects of the crypto bear market in July, when its exposure to Three Arrows Capital’s meltdown left it on the brink of bankruptcy. At that point, BlockFi experienced a loss of $80 million, but Bankman-Fried jumped to the rescue with a $400 million line of credit and the option to acquire the company at a maximum of $240 million.

As was later revealed, the FTX group wasn’t the most trustworthy creditor. Following the collapse of FTX due to alleged fraudulent conduct from its executives, BlockFi halted withdrawals from its platform, signaling that things were not quite right. 

Whether the FTX contagion will continue is a question that will be answered in the following weeks and months. Given the financial issues of Genesis and DCG, the situation doesn’t seem to be over.