BlockFi CEO Blames FTX and Alameda Research for Bankruptcy
During his testimony at Sam Bankman-Fried’s criminal trial, BlockFi CEO Zac Prince pointed fingers at FTX crypto exchange and its sister trading firm Alameda Research for his company’s bankruptcy. Prince stated that he would not have provided funds if he had known false balance sheets were being used.
Prince revealed that BlockFi had $1.1 billion on the exchange but declared bankruptcy due to the actions of Alameda and FTX. He emphasized that BlockFi would not have lent funds to Alameda if it knew customer funds from FTX were involved.
According to Prince, BlockFi called some loans, but there was still $650 million outstanding. He mentioned that Grayscale Trust and Robinhood were posted as collateral.
Bankman-Fried’s Trial and FTX’s Bankruptcy
Sam Bankman-Fried’s trial is in its second week, with the case expected to last around six weeks. The former FTX CEO faces severe charges, including fraud, for allegedly using billions of customer assets for failed investments. FTX filed for bankruptcy protection last year.
BlockFi’s Bankruptcy Protection
In November 2022, BlockFi filed for bankruptcy protection following FTX’s collapse. Its major creditors included FTX.US and the Securities and Exchange Commission (SEC). Currently, BlockFi is undergoing the bankruptcy process and has urged eligible parties to vote in favor of the bankruptcy plan by the September 11 deadline.
The successful approval of the plan will enable a fair conclusion to the chapter 11 cases and expedite the return of client funds.
Hot Take: BlockFi CEO Holds FTX and Alameda Responsible for Bankruptcy
BlockFi CEO Zac Prince testified in court, blaming FTX and Alameda Research for his company’s bankruptcy. He expressed that if he had been aware of the false balance sheets used, he would not have provided funds. The trial of former FTX CEO Sam Bankman-Fried continues with severe charges against him, including fraud. BlockFi filed for bankruptcy protection after FTX’s collapse, and it is currently working through the bankruptcy process. The company has urged eligible parties to vote in favor of the bankruptcy plan to expedite the return of client funds.
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