BlockFi, the first direct casualty of crypto exchange FTX’s collapse, has told a US bankruptcy judge that the US cryptocurrency lender was “the antithesis of FTX” and that it would seek to return customer funds as quickly as possible, reports Reuters.
BlockFi filed for Chapter 11 protection on Monday, citing FTX’s collapse and volatility in the crypto markets. Earlier in November, BlockFi had paused withdrawals from its platform amid uncertainty about FTX’s stability.
BlockFi attorney Joshua Sussberg went to great lengths to distance BlockFi from FTX at the company’s first bankruptcy hearing in Trenton, New Jersey. While detailing the companies’ complex financial relationship, Sussberg emphasized BlockFi did not face the myriad issues plaguing FTX, which spectacularly imploded earlier this month, sparking fears of contagion across the industry, reports Reuters.
FTX’s bankruptcy filings have revealed missing assets and a complete failure of corporate controls – whereas BlockFi had mature and consistent leadership, hired the right experts, and implemented the proper procedures and protocols, Sussberg said.
BlockFi was “shocked and dismayed” to learn about FTX’s poor management, Sussberg told US Bankruptcy Judge Michael Kaplan.
While giving Kaplan an overview of BlockFi’s history, Sussberg described the multiple ways in which the company and FTX were entangled.