Crypto Firms in Bankruptcy Proceedings
Crypto companies currently in bankruptcy proceedings
3AC
Voyager
Celsius
FTX
BlockFiRestructuring lawyers up big
— db (@tier10k) November 28, 2022
End of an Era
🚨 BlockFi has now filed for Chapter 11 bankruptcy.
This is a day many of us expected, but it’s the end of an era for the lending and yield earning platform that had previously been able to survive (or so it seemed) the same fates as Voyager and Celsius. pic.twitter.com/MEjmO4v98a
— Mario Nawfal (@MarioNawfal) November 28, 2022
The Blockfi bankruptcy marks the end of an era. In the summer of 2021 on Twitter spaces, retail investors were shocked and angry when I suggested that Blockfi and Celsius would go under. The lure of high yields paid weekly was simply too much to resist. https://t.co/eiVTlGqPar
— Mike Alfred (@mikealfred) November 28, 2022
The Balance Sheet
I can’t wait to see this balance sheet. Did SBF stuff Blockfi with FTT in order to collateralise loans to Alameda that came from Blockfi customers? pic.twitter.com/48ziuaxiph
— Arthur Hayes (@CryptoHayes) November 28, 2022
JUST IN: BlockFi has $1-10 billion in liabilities but only $256M cash on hand
— Bitcoin Magazine (@BitcoinMagazine) November 28, 2022
Assets $256 million. Liabilities $1 to $10 billion.
Fun Fact
Fun fact: The SEC has a $30 million unsecured claim on BlockFi
— Conks (@concodanomics) November 28, 2022
The SEC has a $30 million unsecured claim on BlockFi.
Inverse Cramer Strategy Yet Again
BlockFi has officially filed for Chapter 11 Bankruptcy. This isn’t a surprise because Jim Cramer endorsed them. pic.twitter.com/tkcgfcsmct
— Inverse Cramer (Not Jim Cramer) (@CramerTracker) November 28, 2022
The Wall Street Journal reports BlockFi Files for Bankruptcy as Latest Crypto Casualty
BlockFi, based in Jersey City, N.J., is only beginning to answer how its hundreds of thousands of customers will fare in an insolvency. The company’s top 10 creditors alone are owed close to $1.2 billion, according to its filings with the U.S. Bankruptcy Court in Trenton, N.J, with the total amount of liabilities likely to be much larger.
The firm, founded in 2017 by Zac Prince and Flori Marquez and backed by Thiel Capital spinout Valar Ventures, lends money to customers using their cryptocurrency assets as collateral. Bain Capital, Tiger Global Management and a fund operated by the Winklevoss twins are also included among BlockFi’s equity investors, according to PitchBook Data Inc.
FTX, the largest crypto company to file for bankruptcy to date, has said in court papers that its 50 largest creditors are owed more than $3 billion, and its new managers are still assessing its total obligations to customers. Celsius Network LLC, a crypto lender that filed bankruptcy in July, listed $5.5 billion in total liabilities when it entered court protection, including more than $4.7 billion owed to its users.
As of 2021, BlockFi had between $14 billion and $20 billion in customer deposits and had lent out $7.5 billion.
What Happened?
Q: How did this happen?
A: Lure customers with a promise 10% or more interest on pledged crypto, backed by nothing, then borrow against your own coin using inflated values of your coin as collateral.
Interest is paid not in US dollars but in worthless tokens backed by nothing.
The above Q&A is a general statement, not just BlockFi.
Hoot of the Day
Here’s the hoot of the day and it typifies crypto in general: Bankrupt BlockFi said it will focus its attention on getting assets from bankrupt FTX.
That will drain the final $256 million in customer deposits. Somehow I expect the SEC will be first in line if anything remains.
Was the Crypto Bubble the Worst of Its Kind?
A Bloomberg writer attempts to make that case. I strongly disagree and take the other side of the debate.
For discussion, please see Was the Crypto Bubble the Worst of Its Kind?
Final Question
What are Ethereum, Bitcoin, and US dollars backed by?
This post originated at MishTalk.Com.
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TREND TRACKER | DATA INSIGHTS | RENT REPORT — Boston, MA, November 23, 2022: Due to high inflation, reduced consumer spending, higher rents and other economic pressures, U.S.-based small business owners’ rent problems just escalated to new heights nationally this month, based on Alignable’s November Rent Poll of 6,326 small business owners taken from 11/19/22 to 11/22/22.
Unfortunately, 41% of U.S.-based small business owners report that they could not pay their rent in full and on time in November, a new record for 2022. Making matters worse, this occurred during a quarter when more money should be coming in and rent delinquency rates should be decreasing. But so far this quarter, the opposite has been true.
Last month, rent delinquency rates increased seven percentage points from 30% in September to 37% in October. And now, in November, that rate is another four percentage points higher, reaching a new high across a variety of industries.
If you are scared then you can go to gold and you won’t have to bitch about the deficit anymore.