Financials that had previously been redacted but were accidentally uploaded without the redactions on Tuesday show that bankrupt cryptocurrency lender BlockFi had over $1.2 billion in assets linked up with Sam Bankman-Fried’s FTX and Alameda Research.
Contrary to what earlier disclosures would have implied, BlockFi had a higher exposure to FTX. Following the failure of FTX, which had committed to help the struggling lender before its own implosion, the company filed for Chapter 11 bankruptcy protection in late November.
Assets tied to FTX totaling $415.9 million and loans to Alameda totaling $831.3 million are included in the amount displayed in the unredacted BlockFi filing. These numbers are as of January 14. The bankruptcy of FTX in November, which rocked the cryptocurrency markets, included both of Bankman-Fried’s businesses.
BlockFi’s attorneys had earlier stated that the loan to Alameda had a value of $671 million and that there were $355 million more in frozen digital assets on the FTX platform. Since then, ether and bitcoin have gained momentum, increasing their value.
The creditor committee’s advisor M3 Partners put together the financial presentation. The company is completely made up of BlockFi customers who are owed money by the insolvent lender, and it is represented by the law firm Brown Rudnick.
BlockFi retail clients
Six-month period from May 2022 to November 2022
$1K |
480 |
73 |
73 |
$62,589 |
$39,343 |
($147,937) |
($108,594) |
$67,717 |
$1,029 |
|---|---|---|---|---|---|---|---|---|---|
$1k-10k |
133 |
20 |
93 |
$474,085 |
$165,102 |
($762,525) |
($597,424) |
$234,215 |
$3,255 |
$10K-50k |
40 |
6 |
99 |
$846,453 |
$195,101 |
($1,013,265) |
($818,164) |
$310,223 |
$3,796 |
$50K-250k |
8 |
1 |
100 |
$760,747 |
$173,954 |
($820,328) |
($646,374) |
$321,925 |
$3,716 |
$250K-1m |
748 |
0 |
100 |
$325,588 |
$138,605 |
($535,753) |
($397,148) |
$123,078 |
$1,233 |
over $1m |
169 |
0 |
100 |
$603,298 |
$361,508 |
($1,012,199) |
($650,692) |
$114,660 |
$1,056 |
Total |
662 |
100 |
100 |
$3,072,760 |
$1,073,612 |
($4,292,007) |
($3,218,395) |
$1,171,818 |
$14,085 |
The unredacted filing was posted in error, a lawyer for the creditor committee confirmed.
Additional details on BlockFi now include the company’s customer base, in-depth information about the size of their accounts, and trading volume.
Nearly 73% of the 662,427 users of BlockFi had account balances under $1,000. These clients traded a total of $67.7 million in the six months from May to November of last year, when the overall volume was $1.17 billion. According to the presentation, BlockFi generated trading revenue of over $14 million over that time, averaging $21 per customer.
In addition to wallet assets worth $366.7 million, the corporation had cash on hand of $302.1 million. According to the presentation, the crypto lender has unadjusted assets totaling roughly $2.7 billion, with nearly half linked to FTX and Alameda.
The failure of BlockFi was sparked by exposure to Three Arrows Capital, a cryptocurrency hedge fund that sought bankruptcy protection in July. Through a $400 million revolving credit line, FTX had set up a rescue plan for BlockFi. However, when FTX had its own liquidity crisis and quickly went bankrupt, the agreement fell through.
The value of the Alameda loan receivable and the assets linked to FTX have both been lowered to zero according to the most recent BlockFi financials provided. BlockFi has assets totaling slightly under $1.3 billion after all modifications, of which only $668.8 million is categorised as “Liquid / To Be Distributed.”
The document reveals that the proposed retention plan, which is intended to keep some staff on board during the bankruptcy process, includes generous pay for BlockFi’s 125 remaining employees.
On an annual basis, the retained workers will receive a total of $11.9 million. Three client success employees are among the remaining team members, and they will each earn an annualized average of more than $134,000.
The presentation claims that BlockFi’s retention “plans are larger than comparable crypto cases,” with five employees who are staying with the company earning an average salary of $822,834.
