BlockFi in no immediate danger, despite Silicon Valley Bank exposure: Report
According to a lawyer representing the bankrupt crypto lender BlockFi Inc.,the company is in a stable financial position with access to ample cash reserves, despite having over $200 million in exposure to Silicon Valley Bank, Bloomberg reported.
According to the report, BlockFi had $227 million invested in a money market mutual fund that Silicon Valley Bank marketed; nevertheless, the risk is probably related to the performance of the fund, not the bank's financials. https://t.co/xsgWgQRsLy
During a bankruptcy hearing on Monday, Christine Okike of Kirkland & Ellis claimed that BlockFi is not in immediate danger and has sufficient funds to continue operating normally, including paying employees and vendors.
Okike reportedly shared;
Okike also noted that BlockFi expects to gain access to a significant portion of cash held with Silicon Valley Bank later in the day. The majority of BlockFi's exposure to Silicon Vally Bank is through third-party money-market mutual funds, which Okike claimed had no direct impact on the company's operations. The bankruptcy case in question is identified as BlockFi Inc., 22-19361, and is being heard in the US Bankruptcy Court for the District of New Jersey in Trenton.
Related: Silicon Valley Bank collapse: Everything that’s happened until now
On March 10, California's financial regulator shut down Silicon Valley Bank, a major financial institution catering to venture-backed companies. The shutdown makes it the first Federal Deposit Insurance Corporation-insured bank to fail in 2023.
On March 11, a bankruptcy filing revealed that defunct crypto lender BlockFi had $227 million worth of uninsured funds allocated to a money market mutual fund (MMMF) offered by the troubled Silicon Valley Bank
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