BlockFi Declares Bankruptcy: High Risk Loans Resulted in Insolvency
The BlockFi business model involved lending out customer deposits to generate a return that was passed back to customers. These loans were high risk and as the market turned counterparty risk left BlockFi insolvent.
- The BlockFi business model involved lending out customer deposits to generate a return that was passed back to customers.
- These loans were high risk and as the market turned counterparty risk left BlockFi insolvent.
- After the collapse of Three Arrows Capital earlier this year, FTX extended a $250 million credit facility to BlockFi, which later morphed into a $400 million credit facility which also gave FTX US the ability to acquire the lender.
- FTX declared bankruptcy earlier this month.
