Crypto lending firm BlockFi is preparing for a possible Chapter 11 bankruptcy protection filing, according to the Wall Street Journal.
The firm also plans to conduct layoffs, the journal reported, citing people familiar with the process.
On Monday, BlockFi said that it would continue its halt on withdrawals, citing "significant exposure to FTX and associated corporate entities."
BlockFi signed a credit deal with FTX US earlier this year with the right to be potentially acquired. Since FTX's collapse, BlockFi has struggled to continue business operations.
Last week, BlockFi’s founder and chief operating officer, Flori Marquez, had said on Twitter that all of the company’s products were operational and client withdrawals were being processed. Marquez had also said that BlockFi’s credit line was from FTX US and that BlockFi would be an independent entity until at least July.
California’s Department of Financial Protection and Innovation suspended BlockFi’s lending license on Friday as the state regulator investigates the crypto lender. The suspension will last for at least 30 days.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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