Unredacted documents mistakenly sent to the bankruptcy court indicate that the now-defunct crypto lender Blockfi had more than $1.2 billion tied up with FTX and Alameda Research. The accidentally revealed documentation shows that Blockfi’s exposure to the bankrupt crypto firm FTX was more than what the company had previously disclosed.
It seems that Blockfi had a lot more money tied up with FTX and Alameda Research than what was originally suggested by the firm. A CNBC report indicates that unredacted documents were mistakenly sent to the bankruptcy court, revealing that Blockfi had $415.9 million connected to FTX, and roughly $831.3 million in loans to Alameda Research.
The latest Blockfi filing shows that $1.2 billion is allegedly tied up with both FTX and Alameda, both of which have filed for Chapter 11 bankruptcy protection. When Blockfi’s bankruptcy case started in New Jersey, lawyers originally quoted the loans to Alameda as being around $671 million, and another $355 million was said to be locked on the FTX exchange. Blockfi paused withdrawals on Nov. 10, 2022, one day before FTX filed for bankruptcy.
Two days before the pause, Blockfi co-founder Flori Marquez told the crypto community that “Blockfi is an independent business entity” amid the FTX drama. She further noted that Blockfi had a “$400 million line of credit from [FTX US] (not FTX.com) and will remain an independent entity until at least July 2023.” Less than a month later, Blockfi filed for Chapter 11 bankruptcy protection in the state of New Jersey.
CNBC further reports that Blockfi has 125 staff members still on Blockfi’s payroll and a total of $11.9 million will be collected on an annualized basis. Furthermore, five top Blockfi executives are still earning $822,000 for the year, according to a presentation designed by M3 Partners. CNBC’s MacKenzie Sigalos reached out to Blockfi, but the company “did not respond to a request for comment.”
What do you think is the impact of this Blockfi revelation? Let us know your thoughts in the comments section below.