The crypto lending platform BlockFi, on the other hand, has filed a lawsuit against Sam Bankman-Fried’s holding company Emergent Fidelity Technologies. They would like to get Bankman-Fried’s shares in Robinhood as collateral earlier this month.
Members of the cryptocurrency community responded to the bankruptcy filing of crypto lending platform BlockFi with a range of feelings, as another platform crumbled during the current bear market.
Despite the BlockFi bankruptcy filing citing the FTX contagion as the reason, podcaster Matt Odell observed a different reason. The lending platform went bankrupt, he said, because it lent customer funds to high-risk traders who played with leverage recklessly. ‘This is a tale as old as Bitcoin, leverage kills, and trusted third parties are security holes,’ he said.
According to Mario Nawfal, the BlockFi bankruptcy filing marks the end of an era for the lending and yield-earning platform. In a tweet, Nawfal said that the bankruptcy filing signals the conclusion of an era for Voyager and Celsius, two previous credit failures.
Some pointed their pitchforks at entrepreneur and podcaster Anthony Pompliano after he introduced them to the lending platform, claiming that they lost most of their savings after listening to his podcast. A Twitter user said that after listening to Pompliano’s podcast, they lost most of their money.
A different member said they diversified their portfolio by investing in BlockFi, FTX and Bitcoin«.
They reported that two of the three had already fallen to zero.
Erik Voorhees, the founder of ShapeShift, reacted to the report that the SEC is one of BlockFi’s creditors by saying that he hopes the SEC will return $70 million that they took from BlockFi so that users can be protected.
The crypto lending platform BlockFi has filed a lawsuit against Emergent Fidelity Technologies, Sam Bankman-Fried’s holding company, claiming that he used Robinhood stock as collateral earlier this month. The company hopes to get Bankman-Fried’s shares back, which were used as collateral earlier this month.