BlockFi files Chapter 11
Crypto lending platform BlockFi officially filed for bankruptcy following FTX's collapse, demonstrating the interconnected contagion throughout the industry.
On November 28, 2022, BlockFi officially filed for Chapter 11 bankruptcy protection, becoming the latest high-profile casualty of the 2022 crypto contagion that had claimed Terra/Luna, Celsius, Voyager, Three Arrows Capital, and FTX. BlockFi's bankruptcy filing revealed that the company had significant exposure to FTX, including a $275 million loan from FTX that was now worthless, along with other obligations that would never be repaid.
The filing listed more than 100,000 creditors and assets and liabilities both in the range of $1 billion to $10 billion. BlockFi had taken a $400 million credit facility from FTX in June 2022, which at the time was portrayed as a lifeline but ultimately became an anchor dragging BlockFi down when FTX collapsed. For the Bitcoin ecosystem, BlockFi's failure represented another data point in the systematic collapse of centralized crypto lending platforms that had promised high yields while taking on excessive risk.
BlockFi had been one of the more established and seemingly reputable players in the crypto lending space, with backing from major venture capital firms and a relatively professional operation. The company had offered interest-bearing accounts for cryptocurrency deposits, including Bitcoin, attracting billions in customer assets with rates that seemed attractive but required trusting BlockFi to manage those assets responsibly.
Like Celsius before it, BlockFi's business model involved accepting customer deposits and lending them to institutional borrowers or using them in various yield-generating strategies. When counterparties like Three Arrows Capital and FTX failed, BlockFi found itself unable to recover loaned funds, creating a shortfall that made it impossible to honor withdrawal requests.For Bitcoin holders who had deposited their BTC with BlockFi seeking passive income, the bankruptcy meant losing access to their assets indefinitely and facing the prospect of recovering only a fraction of their deposits through the bankruptcy process.
The episode concerned centralized custody, liquidity, solvency, withdrawals, or market infrastructure. It therefore exposed counterparty risk around Bitcoin without implying that Bitcoin’s own ledger or consensus rules had failed.
In the 2022 chronology, the event also belongs beside simultaneous changes in monetary policy, regulation, mining economics, Bitcoin development, and the collapse of highly leveraged digital-asset companies. Those surrounding developments provide context without turning correlation into causation.
Its lasting value is the specific change it documented: who acted, what mechanism changed, and what practical consequence followed. That concrete distinction separates the event from routine announcements or ordinary market noise.