BlockFi Executives Lost $800M of Equity in FTX Collapse: Reports

Statue of a sad human in outer space looking down on golden planet
  • BlockFi executives lost about $800 million in equity holdings as a result of a loan from FTX.
  • It was revealed that the executives granted themselves a $500,000 salary increment.
  • The filing also revealed other notable withdrawals by senior members of the crypto lender.
  • FTX, BlockFi, and Sam Bankman-Fried are pursuing 56 million shares of Robinhood, valued at  $465 million.

According to a filing today, a loan from the bankrupt crypto exchange FTX initiated the loss of about $800 million in equity holdings belonging to BlockFi executives. The loss resulted from FTX’s offer of a $400 million loan to BlockFi last June.

The filing included transactions that emanated before the collapse of the crypto lender. Before BlockFi’s collapse in November, the crypto lender recorded a $4 million gross revenue. Further, the filing disclosed how the June transaction affected top executives of the crypto lender. 

How BlockFi Executives Withdraw Funds Before the Collapse of the Platform

According to reports, the Chief executive of BlockFi, Zac Prince, lost $413 million in equity value. He received a salary increment worth between $250,000 and $400,000. Meanwhile, other executives got a pay raise as high as $560,000. 

The massive salary increase took place at the last minute towards the collapse of BlockFi in November. Furthermore, Zac Prince made a transaction worth $9 million from the organization. However, the filing stated that the founder withdrew the funds to pay U.S. federal and state taxes. However, the founder withdrew another $870,000 in August. 

FTX, BlockFi, and Sam Bankman-Fried are pursuing to claim of 56 million shares of Robinhood, which is worth about  $465 million. To claim the shares, BlockFi filed a lawsuit against Sam Bankman-Fried. 

Before FTX filed for Chapter 11 Bankruptcy protection, Alameda Research pledged the shares as collateral to secure the repayment of a loan made by BlockFi.

On the Flipside

  • Presently, most of the transactions don’t contain withdrawer details. The court plans to reveal the details of the creditors by next week. However, in a parallel hearing yesterday, a judge admitted that the names of FTX customers could remain hidden for three months.

Why You Should Care

The recent revelation represents a fraction of the losses resulting from the FTX collapse. According to reports, the FTX collapse lead to $9 billion in losses.

 

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Soumen Datta

Soumen has been a dedicated researcher and writer in the field of cryptocurrencies for the last few years. Even though Indian crypto regulations are still unclear, he believes that India will continue to innovate in the years to come. He loves to play his guitar and sing along in his spare time. He holds bags mostly in BTC, ETH, BNB, MATIC, ADA.