BlockFi, a fallen cryptocurrency lending, and borrowing platform have reportedly posted uncensored financials revealing a $1.2 billion exposure to the FTX exchange and Alameda Research. BlockFi has $415.9 million in assets linked to the FTX exchange and $831.3 million in loans to Alameda.
The M3 Partners, advisor to the creditor committee admitted that they accidentally posted the uncensored version. A filing from November 24th showed that the creditor committee objects to BlocFI paying key employees $12.3 million in retention payments despite their limited operations and assets. The filing also contained ‘trade secrets, confidential research, development, and commercial information.
What happened to BlockFi?
BlockFi filed for Chapter 11 Bankruptcy on November 28th following the FTX’s collapse due to financial troubles. On the same day, BlockFi filed a lawsuit against Emergent Fidelity Technologies, a holding company owned by Sam Bankman Fried. The lawsuit aimed at getting back collateral that the company had pledged to pay on November 9th, including shares in Online brokerage Robinhood.
During the first hearing of bankruptcy proceedings on 29th November 2022, the company’s lawyer stated that they had $355 million in assets tied to the FTX exchange and $680 million in loans to Alameda. But as the value of bitcoin has increased now, the value of these assets has increased.
The impact on the crypto industry
The new revelation of BlockFi’s exposure to FTX and Alameda has raised concerns among experts and investors. The crypto industry is so volatile and unpredictable. Regulators are of the opinion that the crypto industry is not mature enough to deal with the problems at this scale. They are now making the laws and regulations stricter so that innocent investors may not become prey to fraudulent activities in the system.
The public still has got belief in the judiciary system of the U.S. and is hoping that they will always work in the best interest of the public. The value of Bitcoin is still gaining as people see value in cryptocurrency. But we advise you to do your own research before any major investment in the crypto industry.
