Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection, as the market continues to deal with the fallout from the collapse of the FTX exchange.

In its filing with a New Jersey court, BlockFi said that its substantial exposure to FTX created a liquidity crisis. Its exposure was due to loans to crypto trading firm Alameda – owned by former FTX CEO Sam Bankman-Fried – and currencies that became trapped on the FTX platform after traders pulled $6 billion from the platform in three days last month.

The company has listed its assets and liabilities as being between $1 billion and $10 billion. The filing revealed that FTX is BlockFi’s second-largest creditor, with $275 million owed on a loan that was extended earlier this year. BlockFi owes money to more than 100,000 creditors. Its largest creditor is Ankura Trust, which is owed $729 million, while BlockFi's other creditors include the US Securities and Exchange Commission, which is owed $30 million.

Along with filing for bankruptcy, BlockFi has sued a holding company for Bankman-Fried – who is already facing investigations in the Bahamas, Australia, Japan and Turkey – as it seeks to recover shares in Robinhood Markets that it pledged as collateral prior to FTX’s own bankruptcy.

BlockFi agreed a deal with FTX in July which would see it receive a $400 million revolving credit facility, with FTX getting an option to buy it for $240 million.

The increasing volatility of crypto markets in a post-pandemic world had previously seen fellow lenders Celsius Network and Voyager Digital also file for bankruptcy. While retail investment in crypto has waned since Covid has eased, the lack of regulation on crypto – including no requirements for lenders to hold capital or liquidity like traditional lenders – has led lenders and their customers to shoulder large losses.

BlockFi will face its first bankruptcy hearing today.

In a blog post, the company said: "Acting in the best interest of our clients is our top priority and continues to guide our path forward.”

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