Tag: BlockFi

BlockFi Has Cash Access for Staff, Vendors Despite SVB Collapse: Attorney

The New Jersey bankruptcy court had banned BlockFi from investing in secondary financial markets, according to a filing by U.S. Trustee Andrew Vara made on Friday. In a series of letters starting Feb. 17, Vara, a Department of Justice official responsible for bankruptcy matters, urged the lender to shift the funds somewhere where it would be protected by a government guarantee from the Federal Deposit Insurance Corporation (FDIC). Source

BlockFi warned over $227m stuck in Silicon Valley Bank

BlockFi, a cryptocurrency lending platform, has been warned by the bankruptcy trustee that the $227m the company has in Silicon Valley Bank (SVB) may go against bankruptcy laws.  This is because these funds are allegedly not protected by the Federal Deposit Insurance Corporation’s (FDIC) deposit insurance. It is because this amount is invested in a money market mutual fund, which may be illegal per bankruptcy laws. BlockFi faces scrutiny over lack of FDIC insurance BlockFi had previously filed for bankruptcy in November last year following FTX’s collapse. According to paperwork…

Filing shows BlockFi has uninsured $227M in Silicon Valley Bank MMMF

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According to a new bankruptcy filing, defunct crypto lender BlockFi has $227 million worth of uninsured funds allocated to a money market mutual fund (MMMF) offered by troubled Silicon Valley Bank (SVB). SVB — one of the U.S’s largest banks and key partners to venture-backed companies — was shut down by the California Department of Financial Protection and Innovation (DFPI) on March 10, with no specifics offered at the time of the closure. The move adds to the recent Silvergate bankruptcy carnage which has seen crypto markets tumble since the…

Silvergate closes Exchange Network, releases $9.9M to BlockFi

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Crypto bank Silvergate announced on March 3 that it is discontinuing its digital assets’ payment network, claiming the termination is a “risk-based decision”. The move comes after the bank’s stock fell over 59% in the past five days due to fears of a potential bankruptcy.  A disclaimer on Silvergate’s website stated: “Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.”  A second decision on the same day from United States Judge Michael B. Kaplan said Silvergate had…

BlockFi execs, Gemini named in proposed lawsuit by a disgruntled investor

An investor with nearly $2 million worth of funds frozen in bankrupt cryptocurrency lender BlockFi has filed a class action complaint against its founders, two directors and crypto exchange Gemini. In a Feb. 28 complaint filed in the U.S. District Court for the District of New Jersey, investor Trey Greene accused the defendants of numerous wrongdoings, including violating the consumer fraud and exchange acts, breaching its fiduciary duties, as well as offering and selling unregistered securities. “The unregistered securities sold by the BFI [BlockFi] Defendants on behalf of BlockFi were…

BlockFi execs, Gemini named in lawsuit by disgruntled investor

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An investor with nearly $2 million worth of funds frozen in bankrupt cryptocurrency lender BlockFi has filed a class-action complaint against its founders, two directors and crypto exchange Gemini. In a Feb. 28 complaint filed in the U.S. District Court for the District of New Jersey, investor Trey Greene accused the defendants of numerous wrongdoings, including violating the consumer fraud and exchange acts and breaching its fiduciary duties, as well as offering and selling unregistered securities. “The unregistered securities sold by the BFI [BlockFi] Defendants on behalf of BlockFi were…

BlockFi appeals to cancel bankruptcy status for SBF’s offshore investment vehicle

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The consequences of the FTX scandal at the hands of its founder and former CEO, Sam “SBF” Bankman-Fried, continue to surface.  On Feb. 17, it was reported that bankrupt crypto lender BlockFi has appealed to the United States Bankruptcy Court in Wilmington, Delaware to strip the Chapter 11 bankruptcy protections from SBF’s offshore investment vehicle. Emergent Fidelity Technologies Ltd. was used by the FTX founder to purchase a 7.6% stake in Robinhood Markets Inc. According to BlockFi’s motion, the bankruptcy status of Emergent Fidelity holds little purpose and was filed…

Bitfarms settles outstanding loan with BlockFi for $7.75M

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Bitcoin (BTC) miner Bitfarms has settled its debt obligations with BlockFi, closing the chapter on its short relationship with the bankrupt cryptocurrency lender.  On Feb. 9, Bitfarms disclosed that it had settled its $21 million debt obligations with BlockFi for a single $7.75 million cash payment. The settlement was reached weeks after Bitfarms warned that it might default on its BlockFi loan. “Combined with the earlier restructuring and elimination of our capital expenditure obligations in December, this successful negotiation and settlement furthers our initiatives to reduce indebtedness,” said Jeff Lucas,…