Decentral Block Post

Bankrupt cryptocurrency lender BlockFi is trying to block attempts by the similarly bankrupt FTX and Three Arrows Capital (3AC) that aim to retrieve hundreds of millions of dollars to pay back their creditors.

BlockFi claimed in an Aug. 21 filing to a New Jersey bankruptcy court that its own creditors shouldn’t be pushed to the back of the line because FTX’s creditors were harmed by the exchange allegedly misappropriating $5 billion BlockFi lent it.

“FTX seeks to recover on over $5 billion of claims filed against the BlockFi estates at the direct expense of the ultimate victims of FTX’s fraud: BlockFi’s clients and other legitimate creditors.”

“To prevent further injustice to the creditors of BlockFi’s estates, the Court should disallow the FTX Claims under the doctrine of unclean hands,” BlockFi added.

FTX also provided $400 million to BlockFi in June 2022 in addition to buying BlockFi equity pursuant to a loan agreement, the filing stated.

The recent crypto crash hit meme coins hard, culminating with a 9% drop in total market capitalization from Aug. 14 to Aug. 21. During the same period, Pepe (PEPE), Shiba Inu (SHIB), and ApeCoin (APE) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market or simply reflects lagging performance of meme coins.

Meme coins, like Dogecoin (DOGE), burst onto the scene driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins. Their speculative nature leads to rapid price changes and volatility.

Furthermore, the meme coin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.

Capital rotates as investors shift their attention to new trends

For traders, the mid-August crypto market crash was a stark reminder of meme coin volatility. Many of these coins emerged in the last six months, like PEPE, HarryPotterObamaSonic10Inu (BITCOIN) , and Milady Meme Coin (LADYS). This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape.

However, this underperformance is typical for meme coins, as seen in the past, like when APE), SHIB, and PEPE lagged the total crypto market by 18% between June 5 and June 15.