Bankruptcy crypto lender BlockFi’s exposure to FTX appears to be much larger than previously expected, although this is partly due to the recent rise in the price of Bitcoin.
BlockFi, already rocked by previous exposure to Three Arrow Capital (3AC), was forced to file for bankruptcy in court shortly after the fall of FTX Group, taking several other crypto companies down with it.
The relationship between FTX Group and BlockFi was bilateral. On the one hand, the exchange previously provided a line of credit to BlockFi, which at the time was suffering from the collapse of 3AC. On the other hand, the cryptolender had some assets on the FTX platform and lent money to Alameda Research. Together, these amounts of money significantly exceed the amount that FTX could have lent to BlockFi.
More than $1.2 billion is tied up in SBF companies
Due to the recent recovery in the price of Bitcoin, the value of BlockFi loans and holdings in FTX Group has increased compared to the original bankruptcy filing. According to the leaked report, a total of $415.9 million worth of BlockFi assets are currently frozen in FTX accounts. Another 831.3 million dollars worth of now frozen assets were also lent to Alameda. These two items add up to a total of $1.2 billion that BlockFi cannot access to pay creditors – reported about the case on CNBC.
BlockFi also filed a lawsuit against Emergent Fidelity Technologies Ltd., which SBF created to hold its shares in Robinhood. Some of these shares are said to have been pledged as collateral for certain assets that BlockFi has lent to FTX Group. However, SBF is now trying to sell those same shares in order to fund its legal defense against FTX’s creditors.
The leaked document also reveals new information about users’ devices
The leaked document, compiled by M3 Partners for illustrative purposes, was originally intended to be censored before being released to the public. Fortunately, however, the document does not reveal any personal information about BlockFi users.
However, the document does reveal important information from a bird’s-eye view of the cryptocurrency’s users. The document shows that BlockFi had 662,427 customers when it went bust.
73% of the accounts contained assets worth up to $1,000, and another 20% contained between $1,000 and $10,000. About 1% of customers had between $50,000 and $250,000. Less than 1% of BlockFi customers held $250,000 or more in their accounts.
The leaked report also provides data on cumulative trading volumes, balances and activity. Fortunately, however, without revealing the identity of each user.
BlockFi’s bankruptcy proceedings will continue, with the ultimate goal of keeping the platform alive and eventually relaunching stronger if possible.
https://www.youtube.com/watch?v=videoseries