BlockFi Falsely Exposes $1.2 Billion Exposure to FTX, Alameda Research

Bankrupt crypto lending company BlockFi now has more than $1.2 billion in assets tied to FTX and Alameda Research, the two companies founded by cryptocurrency magnate Sam Bankman-Fried.

This is according to unmodified filings compiled and uploaded by M3 Partners, BlockFi Creditor Committee Advisor, CNBC reported on Tuesday.

According to a January 14 financial filing, BlockFi had $415.9 million in assets related to FTX and $831.3 million in loans to sister company Alameda.

M3 Partners and BlockFi did not immediately respond DecryptComment request.

BlockFi, which allows users to earn returns for cryptocurrency deposits, halted withdrawals on November 11, the same day FTX filed for bankruptcy.

The cryptocurrency lender’s expected bankruptcy was officially announced on November 28, with the company revealing on the first day of court proceedings that it had frozen $355 million in funds on FTX and $671 million on a defaulted loan to Alameda, or a total of $1.026 billion.

The most recent financial statements now show that figure at $1.247 billion.

BlockFi’s financial data has been uploaded by mistake

A lawyer for the creditors’ committee reportedly asserted that the unredacted deposit was uploaded in error, and declined to comment further.

The presentation also showed that the value of both the outstanding Alameda loan, i.e. money lent to the company that has yet to be repaid, and FTX-related assets were written off.

The complex relationship between BlockFi and FTX also involved a $400 million balance that the cryptocurrency lender obtained from the exchange in July 2022.

After all the adjustments, BlockFi now has less than $1.3 billion in assets, of which only $668.8 million is described as “liquid/to be distributed,” the report added. These include $302.1 million in cash and $366.7 million in crypto assets.

It also follows an earlier report by bloomberg It claims that, as part of its bankruptcy proceedings, BlockFi will sell $160 million in loans backed by approximately 68,000 bitcoin mining rigs.

Stay up to date with cryptocurrency news, and get daily updates in your inbox.

Leave a Reply

Your email address will not be published. Required fields are marked *