BlockFi’s exposure to FTX seems to be larger than previously expected, although part of this is due to BTC’s recent bullishness.
BlockFi, already rattled by prior exposure to 3AC, was forced to file for Chapter 11 bankruptcy shortly after the FTX Group went down, taking a sizable number of crypto-related companies with it.
The FTX Group’s relationship with BlockFi was two-sided – on one hand, the exchange had previously extended a line of credit to BlockFi, who at the time was reeling from the collapse of 3AC. On the other hand, the crypto lender had some of its assets on the FTX platform and lent money to Alameda Research. Put together, these amounts substantially exceed the amount FTX could have lent to BlockFi.
Over $1.2 Billion Tied Up With SBF’s Companies
Due to Bitcoin’s recent recovery, the value of BlockFi’s loans and holdings with the FTX Group increased compared to the value stated in the original bankruptcy filing. According to the leaked report, a total of $415.9 million worth of BlockFi assets is currently frozen in FTX’s accounts.
A further $831.3 million worth of now-frozen assets was loaned out to Alameda, adding up to a whopping $1.2 billion that BlockFi cannot access in order to make creditors whole, as reported by CNBC.
Additionally, the lender has also filed a lawsuit against Emergent Fidelity Technologies Ltd, SBF’s company set up to hold his shares in Robinhood. Part of these shares was allegedly staked as collateral for some of BlockFi’s assets loaned to the FTX Group, the same shares SBF is trying to sell in order to fund his legal defense to the detriment of FTX creditors.
Leaked Document Reveals Information on Users’ Holdings
The leaked document, which was put together by M3 Partners for demonstrative purposes, was originally meant to be censored before being presented to the public. Thankfully, the document does not reveal personal information on BlockFi users.
However, it does reveal important bird’s eye view info on creditor deposits, indicating that BlockFi had 662,427 customers when it went under.
73% of accounts held $1k worth of assets or less, with a further 20% holding between $1k and $10k. About 1% of clients had holdings between $50k and $250k, and less than 1% of BlockFi customers held $250k or more in their accounts.
The leaked report also provides data on cumulative trading volumes, balances, and activity, thankfully without revealing the identity of individual users, although this information could be surmised for the higher tiers, given enough effort.
BlockFi’s bankruptcy procedures continue chugging along, with an end goal of keeping the platform afloat and eventually coming back stronger, if at all possible.