Crypto lending firm BlockFi is preparing for a possible Chapter 11 bankruptcy filing, The Wall Street Journal reported.
Citing people familiar with the matter, the magazine said the company also planned to make layoffs.
On Monday, BlockFi said it would continue to halt withdrawals, citing “significant exposure to FTX and related corporate entities.”
BlockFi signed a credit agreement with FTX US earlier this year and is entitled to a potential acquisition. Since the collapse of FTX, BlockFi has struggled to maintain business operations.
Last week, BlockFi founder and chief operating officer Flori Marquez said on Twitter that all of the company’s products are up and running, and customer withdrawals are being processed. Marquez also said that BlockFi’s line of credit comes from FTX US and that BlockFi will be an independent entity until at least July.
The California Department of Financial Protection and Innovation suspended BlockFi’s lending license on Friday as state regulators investigate the cryptocurrency lender. The suspension will last at least 30 days.
