New Jersey-based BlockFi, founded by Zac Prince, said in a bankruptcy filing that its substantial exposure to FTX created a liquidity crisis. In a court filing on Monday, BlockFi listed FTX as its second-largest creditor, with $275 million owed on a loan extended earlier this year. Crypto lenders, the de facto banks of the crypto world, boomed during the pandemic, attracting retail customers with double-digit rates in return for their cryptocurrency deposits. Crypto lenders are not required to hold capital or liquidity buffers like traditional lenders and some found themselves exposed when a shortage of collateral forced them - and their customers - to shoulder large losses. In its bankruptcy filing, BlockFi said it had hired Kirkland & Ellis and Haynes & Boone as bankruptcy counsel and Berkeley Research Group as a financial adviser.

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