Given its "significant exposure" to insolvent cryptocurrency exchange FTX, crypto lender BlockFi is preparing to potentially file for bankruptcy protection, The Wall Street Journal reported Tuesday, citing people with knowledge on the situation. BlockFi, of note, has been suffering from liquidity issues in recent months, thus making it vulnerable to the FTX fiasco. The now-bankrupt FTX, which was known for "saving" distressed crypto-related firms, offered BlockFi a lifeline in June in the form of a $250M credit line that sought to bolster its balance sheet. But with FTX filing for Chapter 11 bankruptcy last week, BlockFi's financial health appears to have deteriorated that much more. In addition, the former is planning to lay off some of its staff, the people told The WSJ . The troubled lender's potential Chapter 11 comes shortly after it paused client withdrawals last week due to the "lack of clarity" on the status of Sam Bankman-Fried's crypto empire at the time. BlockFi did not immediately respond to Seeking Alpha's request for comment. Earlier, Bankman-Fried is still trying to raise cash even after bankruptcy .
