The Wall Street Journal is reporting that a Jersey City based cryptocurrency lender is “preparing a potential bankruptcy filing.”

According to the Journal, BlockFi Inc. has halted withdrawals of customer deposits and its sources have acknowledged that the company has “significant exposure” to bankrupt exchange FTX.

Sources told the Journal that BlockFi is planning to lay off some of its workers while it prepares for a possible Chapter 11 filing.

Last week, BlockFi paused withdrawals and limited activity, a consequence of the November 11 bankruptcy filing of cryptocurrency exchange FTX.

Founded by wunderkind Sam Bankman-Fried, FTX reached a valuation of a $32 billion and was promoted by Larry David in a now famous Super Bowl commercial.

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