Crypto lender BlockFi had $1.2 billion exposure to collapsed FTX: Report

Key Takeaways

  • BlockFi had approximately $415.9 million worth of assets tied to FTX and $831.3 million in loans to FTX’s sister trading firm Alameda.
  • In the bankruptcy filing, BlockFi said it had over 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion.

Bankrupt crypto lender BlokFi had over $1.2 million exposure to Sam Bnkman Fried’s collapsed FTX empire, as per unredacted financials accidentally uploaded by the firm. As of January 14, BlockFi had approximately $415.9 million worth of assets tied to FTX and $831.3 million in loans to FTX’s sister trading firm Alameda. These numbers are vastly different from what BlockFi lawyers had said during bankruptcy proceedings.

According to media reports, the latest unredacted filing, which has brought into light the level of BlockFi’s exposure to distressed FTX, was uploaded in error. Reportedly, the value of both the Alameda loan receivable and the assets connected to FTX have been adjusted to $0.

BlockFi’s liquidity issues started following the collapse of the crypto hedge fund Three Arrows Capital (3AC). In June, the liquidity crunch forced BlockFi to get a $250 million loan from FTX  in the wake of the crypto market’s meltdown. Following FTX’s implosion, BlockFi filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey.

In the filing, the company indicated that it had over 100,000 creditors, with liabilities and assets ranging from $1 billion to $10 billion. In late November, during the bankruptcy proceedings, BlockFi’s lawyers said $355 million was stuck on FTX and $680 in loans to Alameda.

Following the exchange’s collapse, BlockFi had told its customers that they couldn’t withdraw their deposits because it had “significant exposure” to FTX, including additional funds the company had hoped to draw on under the agreement and other assets held on the FTX platform.

“We do have significant exposure to FTX and associated corporate entities that encompass obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US,” the crypto lender had previously revealed.

During bankruptcy filing, BlockFi had said it would focus on recovering all obligations owed to the company, including those by FTX.  After filing for bankruptcy in November, BlockFi filed a lawsuit against SBF’s holding company, Emergent Fidelity Technologies, seeking his shares in Robinhood that were pledged as collateral in early November.

Saniya Raahath
Saniya Raahath

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