Topic: BlockFi files for bankruptcy protection. (Read 323 times)

o_e_l_e_o you have said it all and also said my mind. I don't why people are saying that investing in bitcoin is risky. Me, I didn't see any part of risky in bitcoin. Except the price which is in constant flustration. If you buy bitcoin in the bear market and you must expect it to be sold when the market goes up but along the long run for about two years plus, the price might even come down to a very below to the amount you purchased it. And at that time you became afraid that you might lost your coins. Even at that , it is not a risk but just a fear and impatient.

The risk that is involved in bitcoin is your the investor's thinking and  behaviour and not bitcoin that is risky. The mentality of the investor is the cause of everything.

So, exactly as was spelled out in BlockFi's Terms of Service, as I pointed out on this forum dozens of times, including this example from several years ago: https://bitcointalksearch.org/topic/m.56070076

BlockFi quite clearly stated that anything you deposit becomes their property, they will do what they like with it, and when it all goes to shit their users have zero legal protections.
So BlockFi took all the deposits, did anything they liked with them, it all went to shit, and now people are surprised they have zero legal protection?



I don't think bitcoin is that risky at all, especially when compared to ever-more-quickly imploding fiat. Buy bitcoin peer to peer, store in your own wallet, wait. Simple and safe. What is risky is handing your bitcoin over to a bunch of complete strangers because they've promised you a gazillion percent gains.

@joniboini. Agreed and always read the terms and conditions of the service. I reckon much of them are there to legally protect the people behind the service instead of protecting their customers from financial loss hehehe.

It might also be a time we should consider other options like DeFi. If all the risk is placed on the shoulders of the user, we should certainly not surrender the custody of our coins.

I don't think you should do it even if you don't dabble in crypto lending. If you know crypto is a high-risk high-return asset doing something like that would be stupid. Even if you can guarantee that you still live on after losing your home, I'd rather keep it and rent it to others instead.

Damn, looks like a company can just use their ToS to avoid getting screwed by doing a terrible decision. I guess it's best to assume if you use a service like this your money is lost when you deposit them there even if they advertise a protection. Hopefully, more people can learn from this and not repeat the same mistake in the future, although I'm doubtful about that.

I feel sorry for the investors, specially to those who risk selling their house or make a huge loan to enter crypto. Crypto is indeed very very risky.

News update.

It appears it has become official. A judge has declared that Blockfi depositors have given their legal rights to the ownership of their coins when they sent them under Blockfi's custody. According to this article, $292 million of user deposits are owned by BlockFi.

Withdraw your coins from centralized exchanges and other services and read their terms and conditions.



BlockFi Inc. customers who tried to reclaim nearly $300 million in crypto after the company froze transfers last year don’t have a right to the digital assets, a judge ruled, handing potential losses to investors who held interest-bearing accounts.
  
US Bankruptcy Judge Michael Kaplan sided with the company and dismissed the objections of a group of customers, who argued they retained rights to the coins even before they were moved into a secure, digital wallet.

About $292 million worth of assets were trapped on the platform because customers tried to move them after the Nov. 10 halt, BlockFi said in court papers. Those transactions can now be canceled by the company, Kaplan ruled.

Source https://www.bloomberg.com/news/articles/2023-05-11/blockfi-crypto-customers-lose-fight-over-disputed-coin-transfers

I very much agree! Some of those podcasters are social media influencers and marketers who might have only pretended to be Bitcoin maximalists to get more engagement and trick users into holding their coins in Blockfi.

These 2 influencers have criticized Defi in Ethereum where you do not give up custody, however, promoted Blockfi which is a centralized lending service where you give up custody. This is very head shaking.

Filing a lawsuit, or making a claim in bancrupcy procedures is how you assert your right to the asset.  That might sound like drama to you, but if you send a demand letter, and they do not give your money, then do you have some other way to resolve the matter?

It didn't have any impact on the price anymore because its collapse is already priced in, probably even before FTX's own collapse. BlockFi should have already died in the middle of the crypto winter months ago along with Terra, 3AC, Voyager, and others. During that terrible period in the market, the price has already fallen down a lot. So, this bankruptcy now is already treated as inevitable. It was just a matter of time.

When FTX crumbled down all of a sudden, the market situation couldn't get worse. So whether BlockFi's second life would end shortly thereafter, the market won't care anymore. FTX's fall is already huge enough that any effect on the price must have already taken into consideration its expectedly strong ripple effect.

What's surprising is that there are still a lot of people who have funds stuck in BlockFi. What were they thinking? It was already half-sinking months ago.

It's part of the domino effect and I don't think this will end sooner it has a far-ranging effect on the community, it could be the end of cryptocurrency lending or investors and traders will not touch any cryptocurrency lending projects, for now, it is part of the industry within the Cryptocurrency eco-system, but Cryptocurrency will remain strong it's just one of the industry that has big issues the community can move on on this, it's like another bad actor in the industry going down.

Really have to do your own research and i say it again and again not your keys not your crypto. Is cliche as it is its true. Use exchange for said purpose and pull your coins ASAP after. Even best to use a separate virtual box or computer if you have the funds that you only do crypto transactions and banking from. Keep your wallet safe, ALWAYS have a backup and a few backups actually in-case a drive goes dead and your computer. I think there will continue to be more fallout but it wont have much more effect on this market. The market cap is so much bigger then all this but it def hurts the retail guys like us and makes ppl scared and weary of crypto and investing which is not good. But all in time this too shall pass!

The dump of prices yesterday is over. That might just be it after all people in crypto are done dumping since FTX. And blockfi is not up to pointing fingers when they know they were already insolvent long before FTX bailed them out. Anyone who had not withdrawn thier assets before Nov 11 might not ever see them back as they would be counted as the firm's asset.

Victims should just keep an eye on every podcaster they followed who promoted Blockfi, they may have another sponsor with same scheme in the next bull market.

Simply because everyone knows about this since there connection to FTX is already exposed since they one of the FTX collapse. Crypto market is currently experiencing a relief due to the recent positive news brought by Elon Musk and his twitter. Feds is also slowing down now on there increase rate hike gives a positive effect to the crypto community. BlockFi is just filing which means that they are not yet out of business. There’s still a chance that this will be a long game like Celsius that still operating until now despite they already freezed account of all there users money in there DeFi.

I think we might see the bad effect of this news once other project that exposed to FTX starts to pile up for bankruptcy application. I think BlockFi is just the tip of the Iceberg knowing how wide the network connection of FTX to crypto space. They lose multi billion dollars that only means many people and companies is affected due to the intensity of loss.

both are poor

renbtc and wbtc are ethereum based. so their peg structure is multiple steps away from any protocol that links to bitcoin. its just market manipulation of arbitrage that tries to keep them inline. which can break easily as seen by many stable coins over the years.

heck i dont even like liquids Lbtc nor LN msats.. but they are .. (disclaimer not always honoured) supposedly backed by a locked UTXO which is then used as the peg on the other network.. unlike the ERC tokens which are just market set

They owe more than a Billion to thier investors while they only have less than $300M. So why are they making this drama of filing suit against FTX?
It's all just a drama, they were already bought by FTX, and filing a lawsuit will make them spend more money that is supposed to be distributed to thier investors.  


I think renBTC is a better option in pegging or synthetic BTC in crypto where the value stays the same, unlike the wrapBTC.

just so people know

they did not change eth to bitcoin direct

they changed eth(native) to renbtc(eth(erc token) and then
we can only presume they swapped renbtc for btc at 1:1 meaning no price changes
or renbtc for fiat meaning a change on the different market thats not the btc:usd market

anyways
liquids Lbtc is not bitcoin.. its another networks representation of bitcoin
binance Wbtc is not bitcoin.. its another networks representation of bitcoin
renbtc is not bitcoin.. its another networks representation of bitcoin
Ln msat is not bitcoin.. its another networks representation of bitcoin
custodian database btc is not bitcoin

bitcoin only exists on the bitcoin network. no one can take it off the bitcoin network no one can put it back on the network

these other network only have representations which are "supposedly" backed by some [other] entity holding the keys to real bitcoin stash

if people say "lost bitcoin". its not lost.. all 19m bitcoin in circulation are still in circulation/still exist on the network. its just moved to a different address..

if someone had renbtc. then yes that can get "lost" when unlocking it from its subnetwork/altnet to eth

if a service says they dont have it. its not gone. its just in someone elses control

fiat numbers however can be manipulated where a companies valuation can be inflated into a large number without having any fiat. and when it becomes there is no reserves. a companys fiat valuation can shrink to zero without fiat changing hands

Several news media have published companies connected with FTX in the aftermath of its collapse, and people have been imagining the worst that they'd soon follow a collapse. So the effect of the news this time will no longer have much effect on bitcoin.

Someone has already posted this news about BlockFi filing for chapter 11 - bankruptcy. The thread[1] was posted on the Exchanges section and it's better if everyone's going to continue the discussion there as that's the first thread that's been made for the said topic.

[1] [Breaking] Crypto Lender BlockFi Filing for Bankruptcy

Check the 1h candles of ETH/BTC pair from 20th november, when the hacker first started swapping his eth for renBTC,(SOURCE). We fell from 0.0725 to almost 0.0685 BTC per eth, around 5% fall. Meanwhile, ironically even BTC fell down 1000$ points (from 16.7k to 15.7k and even a bit below that time so the hacker caused a chain of panic attack on eth which had subsequent effect on btc as well. But now you can see, eth/btc got back up to pre-dump levels caused by the hacker 😝.

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I believe even if someone dumps all the eth, the exchange trading bots get affected and cause a dump on btc as well although the reaction may be short-lived but you cant ignore the facts!
The main reason is blockfi already got rekt once before and was bailed out, so people are getting used to this sh*t.

Well I believe getting stronger mean not being affected by the same news.  What you stated is an example of getting stronger, since the Bitcoin market resistance to dump whenever there is this kind of bad news seems getting tougher.


Haven't have any update on the swapping but if ever ETH is dumped for BTC, it is obvious that ETH price will somehow plummet a bit while BTC price is somehow getting pumped slightly since the one in demand here is BTC and the one in sell off is ETH.