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VC funds caught up in BlockFi collapse

The fallout from the collapse of Sam Bankman-Fried’s now bankrupt FTX empire continues with another digital assets startup, BlockFi Inc, announcing it has filed for Chapter 11 bankruptcy protection, according to a repot by Pensions & Investments Online.

And a host of VC funds are among investors likely to be impacted by the collapse with the report citing Preqin data as revealing that early funding rounds in the company, which was founded by in 2017 by Zac Prince and Flori Marquez, included PJC, ConsenSys Ventures, Galaxy Asset Management, Social Finance, Alumni Ventures Group, Lumenary and Kenetic Capital.

The company also raised additional funding later in 2018 from from Susquehanna Capital, Devonshire Capital, Morgan Creek Capital Management, Recruit Strategic Partners, CMT Digital and Akuna Capital.

A number of venture funds also invested in follow-on Series A, B and C rounds in 2019 and 2020, including Winklevoss Capital, Valar Ventures, Avon Ventures, Hashkey Capital, Castle Island Ventures, Arrington XRP Capital, Formic Ventures and Purple Arch Ventures, and SCB 10X, the technology investment arm of Thailand’s oldest bank, Siam Commercial Bank.

In 2021, BlockFi completed a Series D fundraising round led by Bain Capital Ventures, partners of DST Global, Pomp Investments, and Tiger Global, while additional investors tom back the firm last year included Bracket Capital, ParaFi Capital, Paradigm, The Venture Collective, CMS Holdings LLC, Rose Park Advisors, Definitive Capital Management, Investlink Holdings, Empede Capital, Jump Capital, Breyer Capital, Pacific Century, Hudson River Trading, Third Prime Capital and the Gaingels Syndicate.

In the Chapter 11 filing, the company indicated that it had more than 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion, as well as the US Securities and Exchange Commission, which is owed $30 million after after BlockFi agreed to settle charges that it failed to register its products properly.
 

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