BlockFi JUST Filed for Bankruptcy | Ridiculously *BAD* Cash BALANCE!

holy smokes it's Cyber Monday and block

fine just filed for chapter 11

bankruptcy in this video you're going to

see how much cash they actually have on

hand why they suggest that they're going

bankrupt and oh my Lordi the insanity of

a lesson that is not your keys not your

crypto something we've been talking

about for years on this channel but boy

this really puts the nail in the coffin

of trying to farm yields on exchanges

and it comes after the FTX collapse

Let's Talk About It by starting with

some of these tweets but first today in

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lectures to come out I'm very very

excited okay take a look at this blocked

by 11 hours ago withdrawals will remain

fully operational this was on November

10th at 5 37 PM so 11 hours ago block

Phi withdrawals will remain fully

operational block fight 20 minutes ago

pausing withdrawals can't do business

again anymore it's like you can't trust

what these companies are saying this is

why for a week to two weeks prior to

block fight going bankrupt I've been

screaming on the channel and on Twitter

get off the exchanges hopefully you were

able to heed that advice because the

same thing is what happened at FTX

that's why I wrote this is why trusting

institutions is tough Sam bankman freed

says everything fun everything's fine

and then all of a sudden they're going

bankrupt and what was really frustrating

is they actually froze with withdrawals

but then they sent out an email saying

dear valued card holder because I

actually had a block fight credit card

except it was zero balance in light of

the recent developments with block fight

we'd like to provide a friendly reminder

that all terms and conditions of your

cardholder agreement continue to apply

in other words you need to continue

making payments to your credit card

otherwise they'll report you to the

credit bureaus they literally threaten

you here your repayment activity and

account status will continue to be

reported to the credit bureaus so in

other words if you don't pay your bill

even though we're going you know

basically bankrupt here and freezing

withdrawals you have to keep paying your

bill which was crazy and now now folks

it is official today is November 28th

it's Cyber Monday and block fine has

filed for chapter 11 bankruptcy

protection which is usually a way the

company says hey we want to reorganize

we're not going to liquidate we want to

reorganize but we are going bankrupt and

because we're going bankrupt we probably

are going to be in a situation where

shareholders like Equity investors get

wiped out but maybe our company gets

bought out or merged for some form of a

discount with another company and that

company might say hey look we'll take

all your accounts and and all your users

but we'll only pay you 10 cents on the

dollar for everything that's there and

it sucks because exchanges like this

don't usually have what's known as sipc

insurance uh now if let's say you're

investing in stocks through TD

Ameritrade as an example they usually

have a protection of loss of 500 000 per

account now verifying the terms and

conditions obviously on all the trading

websites that you use but that means

that the company goes bankrupt and you

have more than 500 000 invested through

their platform at least you have some

way of getting up to 500k back but with

these crypto companies they don't have

sipc insurance because obviously crypto

hasn't matured to that level of

Regulation and protection yet this

disaster will hopefully lead to those

sorts of protections but this is wild

look at what this statement says here it

says that blockify has

256 million dollars of cash on hand

which they say is sufficient liquidity

for operating expenses but this is the

scary part all right watch this we're

gonna go jump on over to the actual

bankruptcy filing remember they've got

one quarter of a million dollars

available

256 million dollars kind of like an old

crappy 256k modem okay they got 200 all

right a 256 million dollars on hand but

look at this okay current liabilities

are estimated to be a billion to 10

billion dollars now they do say they

think they have Assets in around that

range but assets could be illiquid or

they could be worthless uh you know once

you actually mark them to Market so I

think really all you can expect that

they have is 256 million dollars but

they have liabilities in excess of one

billion dollars up to 10 billion dollars

and I hate to say this but look at this

folks when you look at the attachments

the people getting rich here are the

attorneys look at this one attorney

right here had a retainer they've

already been paid

1.9 million dollars and now they have a

retainer of 750 000 dollars

and here's another attorney prior to

this filing I have received 1.47 million

dollars with a retainer of two million

dollars uh and then that's it's actually

those two law firms here but this

process just gets started a retainer

doesn't mean that's all of the money

right or all of the charges that are

going to happen I think that 256 million

dollars gets whittled away on corporate

salaries and attorneys as they go

through a bankruptcy proceeding which

could take anywhere from six months to

two years and they just Whittle away

that 256 mil to where this probably very

very little cash left over actually at

the end now what reason do they give for

this collapse well they gave us a little

FAQ section which doesn't make any of

this any better so this is a chapter 11

filing with the District of uh the

bankruptcy court for the District of nor

New Jersey they are trying to maximize

value for all stakeholders they think

they'll have over a hundred thousand

creditors and they say here does

blockify hold 100 of client deposits on

FTX they say that the rumor is that a

majority of blockify assets are held on

FTX are false okay well that's it's

important to know that even though the

majority might not be there it's

possible that the way they've written

this up to 49 of assets that blockify

has could actually be held on FTX

however as shared we do have significant

exposure to FTX and the associated

corporate entities that Encompass

obligations owed to us by Alameda in

other words alamina Sam bankman fraud I

mean sandbankment Freed's company his

investment company owes money to block

five and they do hold assets at ftx.com

and they have a credit line with ftx.us

but they don't have access to that

credit line anymore in other words now

they have no credit line and potentially

up to 49 of their assets are gone thanks

to FTX and Alameda owes them a bunch of

money and even though that loan is

considered an asset going back to sort

of that asset argument right alameda's

loan to blockify could be uh or sorry

the other way around uh blockifies loan

to Alameda could be a two billion dollar

loan blockfi may have said hey we're

gonna give you two billion dollars

Alameda because you're promising to pay

us 10 because you all are a fraud and

we're gonna go pay our customers seven

percent on their block five deposits

right that's just an example and then

block five Pockets the difference

blockfi has that massive exposure uh to

Alameda and now technically if the

number is two billion dollars to Alameda

let's say technically that is an asset

so when you look over here her and

you're like well wait a minute Kevin on

the uh liabilities and assets section it

says that they have assets of one to ten

billion dollars yes but again that

estimated asset uh oh that that Alameda

owes block fighting money could be worth

zero could be worth zero dollars that's

why you could really only go with the

cash they have in my opinion 256 million

dollars but the problem is that'll get

whittled away so they say here we're

shocked by the news regarding FTX and

Alameda uh we like the rest of the world

found out about the situation through

Twitter

that's you couldn't even get a text

message from Sam making free what does

this mean for clients they say here

acting in the best interest of our

clients is our top priority and

continues to guide our path forward we

will communicate with our clients

through the process to ensure they hear

from us directly we are not requesting

authority to restore platform activity

at this time in other words if you have

money on block fight it's stuck on there

for a while and it's basically subject

to the chapter 11 process they encourage

you to maintain your blockfly app and

account at this time and withdrawals

from block fight continue to be paused

so can't get your money out if you have

Auto deposit stop putting your money in

I definitely recommend not put your

money in anymore in fact I mentioned

before block find and FTX collapsed

multiple times make sure to get off

exchanges I even closed my blogfi credit

card about a month ago and these are

things we've talked about not only on

Twitter but on YouTube about getting off

exchanges uh well actually we've been

talking about that for years but I'm so

devastated by this is so terrible but

anyway let's see what else we have here

at this time withdrawals continue to be

paused when will blockify complete the

restructuring process

promptly as possible the ultimate timing

may vary I would say six months to two

years how do you keep informed they've

got a link to the attorney's website

where you can get the filings what does

this mean for retail loans so this is

potentially a good thing right here at

this time you can see this here at the

bottom at this time clients do not have

the ability to post new funds at blockfi

as a result we have put your loan into

forbearance finally so even though they

sent out that email about credit cards

and Loans it looks like everything's in

forbearance any amounts due including

interest and maturity payments are

placed on hold until further notice the

interest rate on your loan will be set

to Zero from November 11 2022 onwards

and clients will not be charged

additional interest or when a loan

enters delinquency after November 11th

your loan will not be reported as

delinquent two credit bureaus you will

not be expected to make payments at

maturity while your loan is on hold and

there will be no late fees associated

seed should you have questions hit us up

at blockfi.com contact what if my retail

loan is showing as delinquent for

us-based customers Loan Servicing

provider scratch will show your loan is

delinquent in their system but given the

zero percent interest your loan will not

accrue any interest relate penalties

your loan will not be reported as

delinquent to credit bureaus is block

file liquidating retail loans if the

loan reaches a liquidation or loan to

value if the loan reaches liquidation

loan to value while platform activities

are paused in other words are you going

to get margin called if Bitcoin

continues to fall at this time clients

do not have the ability to post new

funds to block fi as a result no

basically they're pausing Margin Call

requirements now block files or I should

say Bitcoin is actually relatively

stable after this mostly because this

block 5 bankruptcy was anticipated we

saw the writing on the wall for this we

just now finally have some of the

details of it and that cash on hand is

pretty dang disgustingly low so pretty

terrible situation this sucks huge

lesson in staying away from companies

that are not sipc insured and not your

keys not your crypto happy Cyber Monday

everyone thanks so much for watching and

we'll see in the next one goodbye