Bloomberg Tax
Nov. 28, 2022, 7:05 PM

Crypto Traders Dealt Latest Blow With Money Trapped on BlockFi

Claire Ballentine
Claire Ballentine
Bloomberg News
Paulina Cachero

The bad news just keeps coming for retail traders with money on crypto platforms.

In the wake of FTX’s rapid downfall, BlockFi Inc. became the latest crypto lender to file for bankruptcy on Monday. The New Jersey-based company had warned customers more than two weeks ago it would halt withdrawals, and now traders have to wait out the bankruptcy process to see if they can get any of their money back.

Past examples offer little hope. Insolvency proceedings can take months or even years, and BlockFi had significant exposure to Sam Bankman-Fried’s empire of companies, which are themselves ...