BlockFi, a centralized crypto exchange has collapsed and filed for Chapter 11 bankruptcy on Nov 28 2022, leaving many of users eating dust. This exchange was promoted heavily by many personal finance influencers including Andrei Jikh. Before it collapsed, BlockFi halted withdrawals amid massive withdrawals from their customers as a result of the collapse of the Sam Bankman Fried led FTX.
YouTubers here and there have come out detailed about their losses in BlockFi.
BlockFi seemed so legitimate and stable at the time where it had a VISA tied credit card.
The main issue for BlockFi was most likely a lot of cryptos were borrowed to the collapsed FTX. All the investors previously touting how good crypto staking interests were in double digits. Now is the day of reckoning, too high interest deposits are really too good to be true. On the BlockFi site, the company slogan was "Don't just buy crypto, earn it". Basically, the crypto (bitcoin, ethereum, dodge etc) that investors bought could be leased out to other entities (eg FTX) to earn crypto interest (crypto terms is called staking). Interestingly, BlockFi was bailed out by FTX earlier and the FTX collapse has spread to BlockFi.
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