BlockFi: What is it and why did it collapse?

BlockFi is a financial company that operates with lending or mortgaging digital assets co-founded by Zac Prince and Flori Marquez. Although once considered a unicorn of the crypto industry, the company has now declared bankruptcy following the departure of FTX.

If you want to know more detailed information about the name BlockFi and why it collapsed, stay tuned for upcoming content with AZCoin!

What is BlockFi?

BlockFi is a platform with the same name as its parent company, co-founded by two big names in the cryptocurrency industry, Zac Prince and Flori Marquez. Accordingly, this platform is developed and operates as a financial lending application.

Unlike conventional financial lending platforms, BlockFi steps deeper into the cryptocurrency market by allowing users to borrow or mortgage crypto assets. This can be said to be the unique point that makes this platform once known as the unicorn of the electronic finance world.

Although unique, creative, and visionary, BlockFi suffered the fate of bankruptcy in 2022 just after the collapse of the FTX exchange. For more specific details about the collapse of this platform, you can follow the next content to know more.

Some knowledge related to BlockFi that you can read more: API Integration, Crypto Loans, Crypto Credit Card

How did BlockFi ever work?

BlockFi was built as a platform for lending and mortgaging electronic assets, so the main activities of this platform also revolve around this goal:

• Cryptocurrency loan: The feature allows users to use the electronic assets they own and are accepted by the platform to borrow cryptocurrency at an interest rate of 6% for one year.
• Create a credit card: The feature allows users to create a credit card to access the services that BlockFi provides as well as to store their electronic assets most safely.
• Savings deposit: The feature allows users to deposit a certain amount of cryptocurrency approved by the platform. The user will then receive an annual interest rate corresponding to the amount of assets deposited as well as the type of asset submitted.

Above is information for the outstanding features that have been provided at BlockFi, there are still some other small features but we will temporarily ignore them.

Why did BlockFi go bankrupt?

As mentioned previously, BlockFi declared bankruptcy in 2022 after more than 5 years of operation since its founding in 2017. According to many sources and also the company’s representative, the reason BlockFi collapsed came from too much influence from the FTX cryptocurrency exchange.

Side information for you is that FTX was once a very large cryptocurrency exchange and had signed a deal worth up to 400 million USD with BlockFi. However, this electronic exchange completely collapsed in 2022, taking many other victims with it, including BlockFi.

In short, no matter what the cause of BlockFi’s bankruptcy is, at present, this company is bankrupt and has a large debt with more than 100,000 creditors. This can be seen as the end of a once very successful financial company.

What is the future for BlockFi now?

As of October 2023, the BlockFi company has been confirmed to have exited product status. Regarding its debts, the company also announced that it will liquidate all remaining operations and assets until the end to return assets to all of its customers.

Whatever the event the company finds disturbing, the implications are significant for the company and the way it operates. One of the influences came from BlockFi founder Zac Prince and Flori Marquez when he announced he would resign and move to a new field.

In summary, the future ahead of BlockFi is still very bold and there are still many difficulties to overcome if it wants to regain its former glory.

Conclusion

Finally, we have successfully introduced to you all the information about the company BlockFi and the reasons why it collapsed. Thank you for reading and see you again in even more interesting content at AZcoin.