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Blockfi’s failure is a ripple effect from the FTX debacle within the cryptoverse. Some call for legal action again, Bankman-Fried, but many are screaming for regulation.
In reality, regulation is on the way, and FTX may have hastened the timetable.
Everything I have seen tells me that Blockfi (a trading exchange and interest-bearing custodial service for cryptocurrencies) is a stand-up company caught up in the FTX crash.
As sad as it is, the silver lining is that the company has filed for chapter 11 bankruptcy, not chapter 7.
This is good news because Blockfi is looking to restructure rather than sink in the FTX tidal wave.
“BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”
“BlockFi intends to swiftly bring these chapter 11 cases to an appropriate conclusion and restore liquidity to its firm, preserving and maximizing client value. The debtors’ goal [is] to provide clients [with] as close to a full recovery as possible.”
Mark Renzi, managing director of Berkeley Research Group, the financial adviser to BlockFi.
Why the cryptoverse is here to stay
The year 2022 has been an F5 tornado plowing through the cryptoverse. It has cleared (exposed) many shaky and shady things in the space. Unfortunately, it has also hit some of the more legitimate businesses — Blockfi, but it has not collapsed the cryptoverse. Such a move speaks to the integrity of the company and the longevity of the cryptoverse.
Renzi says that Blockfi is well-positioned to move forward despite the setback.
He says the company is “doing the right thing and maximizing value for clients and stakeholders.” Renzi also noted that Blockfi’s management team is experienced, knowledgeable, and responsible guardians of the stakeholders’ assets.
Reni said, “To date, I have not found any failure of corporate controls or systems integrity, and I have found BlockFi’s financial information to be trustworthy.”
In other cryptoverse news
In a move to keep customers’ trust, Binance is introducing “proof-of-reserves” as a way to show customers that the trading platform company is solvent.
Binance announced its initial steps to shore up the cryptoverse by introducing a crypto industry fund focusing on preserving troubled crypto companies. The fund will begin with $1 billion and could grow as much as $2 billion.
Animoca Brands, Jump Crypto, Polygon, and Ventures have also contributed to the fund.
Why this is important
Blockfi could have greatly benefited from such a fund, possibly avoiding bankruptcy. Such a move is one more example of the staying power of the cryptoverse and the belief of those committed to it.
Someone commented (and I believe rightly so) that the FTX fallout — though massive in the cryptoverse — is minor in the overall financial picture and will only have a short-term impact on the market.
The cryptoverse is here to stay, and it could be for you. Follow along as I learn; maybe you will learn, and perhaps, together, we can explore the cryptoverse.
Disclaimer: I am an avid student of all things crypto. The cryptoverse caught my attention when COVID-19 captured the world and locked down the global economy. Since then, I have dedicated a portion of my time to learning about this currency — the currency of the future — and international business. As a writer, I have determined to journal my discoveries. I have chosen to write them in short, bite-sized articles to help anyone interested in learning about this space. These articles are not written in cryptoese or investments but are easy-to-understand articles. I am not offering advice, simply the information I discovered on my unexpected journey into the cryptoverse. There could be something for the seasoned investor to glean from reading, but my focus is on the crypto-curious.
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