Crypto lender BlockFi has filed for Chapter bankruptcy protection.

Crypto lender BlockFi filed for bankruptcy protections Monday, days after suspending withdrawals amid the ongoing fallout from exchange FTX's bankruptcy.

BlockFi is the latest crypto firm to file for bankruptcy following the collapse of Sam Bankman-Fried's crypto empire.

Sam Bankman-Fried (SBF) led the FTX crash has impacted the crypto market in the worst way possible. Crypto lender BlockFi is reportedly preparing for bankruptcy filing due to its extensive exposure to FTX. However, Ripple Counsel has raised some crucial questions over the FTX-BlockFi connection and its U.S. SEC settlement.

Alderoty believes that the SEC settlement deal with BlockFi backed the crypto lender into a corner, putting customers at risk.

Crypto lender BlockFi has put client loans into forbearance, according to a customer email viewed by The Block. "At this time, clients do not have the ability to post new funds to BlockFi," the email states. "As a result, we are putting your loan into administrative forbearance. Any amounts due, including interest and maturity payments, are placed on hold until further notice."

Crypto lender BlockFi has put client loans into forbearance, according to a customer email viewed by The Block. 

Crypto lender Nexo had offered BlockFi a deal worth a total of around $850 million, Nexo co-founder Antoni Trenchev said. It included $30 million for the acquisition of 51% of BlockFi through a combination of cash and equity, $30 million payable to BlockFi's existing shareholders upon successful S1 registration of BlockFi's yield product with the U.S. Securities and Exchange Commission and a $500 million credit line to address BlockFi's liquidity needs, according to the investment proposal document.

BlockFi yesterday acknowledged considerable exposure in the form of not just assets on the exchange but also additional obligations owed to BlockFi by FTX, especially an undrawn line of credit from FTX, despite refuting rumors earlier that the majority of its assets were stored in FTX exchange.

BlockFi has responded to the controversies surrounding FTX and its reported connection to the embattled cryptocurrency exchange in a recent statement to its users.