• BlockFi mistakenly released financial documents that showed it had $1.25 billion of its finances tied to FTX and Alameda Research.
• Of the $1.25 billion exposure to FTX and Alameda, BlockFi has $831.3 million in loans to Alameda Research.
• Sam Bankman-Fried, the FTX CEO then, revealed that his company had granted a $250 million loan to BlockFi.
BlockFi, a bankrupt crypto lender, recently released confidential financial documents that showed it had far more of its assets tied to FTX and Alameda Research than previously disclosed. The documents revealed that $1.25 billion of BlockFi’s finances were linked to FTX and Alameda, with $831.3 million of those funds in loans to Alameda Research.
In addition to the loan to Alameda, the documents also show that BlockFi had $415.9 million of its assets tied to FTX. MacKenzie Sigalos, a CNBC reporter who reported the development earlier today, appeared on CNBC’s Squawk Box to shed more light on the report and the implications of these figures. According to her, the amount reported to have been tied to FTX represents almost half of BlockFi’s total assets.
It appears that FTX had tried to bail out BlockFi back when it was in financial trouble. Sam Bankman-Fried, the FTX CEO then, had revealed that his company had granted a $250 million loan to BlockFi. This revelation came a week after FTX had given a $485 million loan to Voyager Digital.
Ripple’s General Counsel attempted to point out the SEC’s role in the FTX fiasco, recently highlighting that the SEC had admitted that FTX had used customer funds to try and bail out BlockFi. The SEC had also noted that FTX’s actions could raise “significant customer protection issues” and that the company may have violated federal securities laws.
Ultimately, the documents released by BlockFi are a stark reminder of how risky investing in cryptocurrency can be, as well as how important it is to do one’s due diligence before investing. The documents also highlight the importance of having a proper system in place to protect customers from any financial misdeeds. For now, BlockFi’s future remains uncertain, and only time will tell how the entire situation will unfold.