Cryptocurrency lender BlockFi Inc. filed for chapter 11 Monday, following FTX into bankruptcy in a stark illustration of the contagion effects that the failure of the crypto exchange has unleashed.
BlockFi blamed its chapter 11 filing on the downturn in cryptocurrency prices this summer and this month’s failure of FTX, a big exchange with ties throughout the largely unregulated industry. FTX’s affiliated trading firm, Alameda Research, defaulted on $680 million owed to BlockFi earlier this month, the firm disclosed in court papers.
