BlockFi Secret Financials Show $1.2 Billion Tie to FTX and Alameda

The Blockfi logo and a representation of the cryptocurrency can be seen displayed on a phone screen in this illustration photo taken on November 14, 2022 in Krakow, Poland.

Jakub Porzycki | NurPhoto | Getty Images

bankrupt crypto lender blockfi Sam Bankman-Fried had more than $1.2 billion in assets tied to FTX and Alameda Research, according to financials that were previously edited but uploaded in error on Tuesday without redactions.

Blockfi’s exposure to FTX was higher than previously suggested. The company filed for Chapter 11 bankruptcy protection in late November. The Fall of FTXwhich had agreed to rescue the struggling lender before its own meltdown.

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The balance shown in the unrestricted BlockFi filing includes $415.9 million worth of assets tied to FTX and $831.3 million in loans to Alameda. These figures are as of January 14. Both Bankman-Fried firms were wrapped up in the November bankruptcy of FTX, which rocked the crypto markets.

BlockFi’s lawyers previously said Alameda had a loan Value $671 million, while an additional $355 million of digital assets were frozen on the FTX platform. Bitcoin and ether have since rallied, increasing the value of those holdings.

The financial presentation was assembled by M3 Partners, advisor to the Committee of Creditors. The firm is represented by law firm Brown Rudnick and is made up entirely of BlockFi customers who are owed money by the insolvent lender.

An attorney for the creditors’ committee confirmed to CNBC that the unredacted filing was uploaded in error but declined to comment further. Lawyers for BlockFi did not respond to a request for comment.

Other information that is now available about BlockFi includes the number of its customers and the size of their accounts, as well as high-level details on trading volume.

BlockFi has 662,427 users, close to 73% of whom have account balances under $1,000. In the six months from May to November last year, those clients had a cumulative trading volume of $67.7 million, while the total volume was $1.17 billion. BlockFi generated more than $14 million in trading revenue during that period, according to the presentation, averaging $21 in revenue per client.

The company had $302.1 million in cash and $366.7 million in wallet assets. Overall, the crypto lender has roughly $2.7 billion in unadjusted assets, with FTX and Alameda tied for nearly half, the presentation showed.

BlockFi’s failure was fueled by exposure to Three Arrows Capital, a crypto hedge fund that filed for bankruptcy protection. In July, FTX made an arrangement rescue plan to BlockFi, through a $400 million revolving credit facility, but the deal fell apart when FTX faced its liquidity crunch and rapidly sank into bankruptcy.

According to the latest release of BlockFi financials, both the Alameda loan receivables and the assets linked to FTX have an adjusted value of $0. After all adjustments, BlockFi only has $1.3 billion in assets, of which only $668.8 million is described as “liquid/distributable”.

Blockfi’s 125 remaining employees are being paid handsomely as part of a proposed retention plan designed to keep some people on board during the bankruptcy process, the filing shows.

Retained employees will collect a total of $11.9 million on an annualized basis. Three of the remaining employees are client success employees, each of whom will take home an annual average of more than $134,000.

According to the presentation, the five employees still with the company earn an average of $822,834, indicating that BlockFi’s retention “plans are larger than comparable crypto affairs.”

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