BlockFi’s CEO Uncovers Billion-Dollar Loss

BlockFi’s CEO Zac Prince took the stand today
(Friday) to testify in the ongoing case against Sam Bankman-Fried (SBF),
highlighting a billion-dollar loss incurred by his crypto lending firm in
connection with Alameda Research and FTX.

According to a report by Coindesk, BlockFi’s
involvement with Alameda Research began between 2020 and 2021. Prince mentioned
the existence of loan agreements between the two companies. Subsequently,
BlockFi extended up to USD $1 billion in loans to Alameda as of May 2022.

BlockFi’s troubles began when it experienced
significant losses due to the collapse of the Terra Luna crypto ecosystem. To
recover these losses, the lending firm initiated a process to retrieve its
loans from Alameda. Surprisingly, the jury was informed that Alameda Research
repaid all the borrowed funds, leading to BlockFi offering new loans worth $850
million to the company.

Besides its relationship with Alameda, BlockFi was a
customer of FTX. It allegedly held the collateral provided by Alameda Research
on FTX and managed customer funds amounting to around $350 million on the
exchange
Exchange

An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv

An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv
Read this Term. BlockFi found itself in a tough financial situation, ultimately
losing “a little over a billion dollars” due to its ties with Alameda
and FTX. This loss later forced BlockFi to declare bankruptcy.