Major crypto firm files for Chapter 11 bankruptcy

It has been a brutal play for the crypto marketplace with the ongoing bearish rhythm and shutdowns and layoffs astatine aggregate enterprises.

Bit.com, a fashionable crypto exchange, and DappRadar, a salient decentralized exertion (dApp) analytics platform, announced they are shutting down.

Then, the OKX crypto speech and Polygon Labs decided to chopped unit arsenic portion of planetary restructuring.

Now, it has travel to airy that a large crypto steadfast has filed for Chapter 11 bankruptcy.

TrustToken was founded successful 2017 and the task launched the TrueUSD (TUSD) stablecoin successful 2018 and the TrueFi uncollateralized lending protocol successful 2020.

In 2022, TrustToken rebranded to Archblock LLC arsenic the San-Francisco institution transitioned from a stablecoin task into a crypto institution focused connected bringing organization superior and accepted plus absorption into decentralized concern (DeFi).

On Feb. 6, Archblock filed for Chapter 11 bankruptcy extortion successful the U.S. Bankruptcy Court for the District of Delaware as it reported more than $100 cardinal successful liabilities against hardly $10 cardinal successful assets.

Chapter 11 bankruptcy is simply a ineligible process nether U.S. instrumentality that lets a idiosyncratic oregon concern that can’t wage its debts reorganize alternatively of shutting down. The main thought is to springiness the institution clip and operation to hole its finances portion inactive operating.

Archblock's bankruptcy filing mentions six debtor entities:

• Archblock LLC

• Archblock (Cayman Islands)

• TrueCoin LLC

• TrueCoin II, LLC

• TrustToken, Inc.

• TrueTrading 1 GP LLC

The filing mentions Alameda Research arsenic a imaginable creditor with an unsecured assertion of $8.5 million.

Founded by bankrupt crypto speech FTX's jailed laminitis Sam Bankman-Fried successful 2017, Alameda Research was a crypto trading firm on insubstantial but operated like a hedge money successful practice. FTX was recovered to be channeling lawsuit funds to its elder executives by pooling wealth via Alameda Research.

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The Archblock bankruptcy filing besides mentions the bankrupt crypto lender Celsius Network arsenic a "stablecoin holder/unliquidated creditor successful a dispute."

As reported earlier, Celsius sued Archblock successful October past twelvemonth for orchestrating an alleged “multimillion-dollar fraud.” The suit claimed that Archblock and its subsidiaries, TrustToken Inc. and TrueCoin LLC, falsely represented their TrueCurrency tokens arsenic afloat collateralized and backed by currency held successful escrow but funneled lawsuit funds into speculative and volatile offshore investments.