BlockFi CEO Now Cashes Out Nearly $10 Million From $400 Million FTX Loan

Key Points:

• BlockFi CEO Zac Prince took out over $10 million from the platform following a $400 million loan from FTX aimed to stabilize customer money.
• FTX also enabled a private worldwide settlement payment, with some of the proceeds going to a counterparty who had threatened BlockFi with legal action.

BlockFi CEO took out over $10 million from the platform to pay taxes last year, while FTX delivered approximately $15 million in payments to specific insider accounts as part of a private settlement.

According to a presentation BlockFi produced summarizing the accomplishments, timetables, and suggested agenda of its current court battle, CEO Zac Prince was able to withdraw about $9.2 million from BlockFi in April 2022 thanks to a $400 million loan from FTX.

In August, Prince withdrew an extra $1.36 million at market rates. According to the corporation, he utilized the monies to pay taxes.

Following sector-wide withdrawals from platforms throughout the industry in June, FTX supplied BlockFi with a $400 million loan in order for the business to process billions of dollars in clients’ requested withdrawals and other transactions between June and November 2022.

BlockFi is one of the numerous firms that borrowed money from FTX, which declared bankruptcy in November. According to the firm, its management team deployed their own funds on the platform, to trade, earn interest, and hold multiple cryptocurrencies under the same terms of service as clients, thereby passing client profits from the FTX bailout to them.

After a counterparty threatened legal action, FTX donated an extra $15 million to BlockFi insiders in June. Because of the settlement arrangement, certain payments from BlockFi were channelled via the executives and finally made to the counterparty, according to BlockFi.

On December 20, 2022, BlockFi has submitted a motion asking a bankruptcy court in the United States to grant permission for its users to withdraw digital assets that are currently locked up in BlockFi wallets.

According to the crypto lender, the action would not have an influence on transfers or withdrawals from BlockFi Interest Accounts, which are now stopped. A division of the Bermuda-based company that manages its non-American activities is called BlockFi International.

Additionally, Coincu reported in late December that BlockFi was in dire straits because of a dispute over Robinhood stock that Alameda used as collateral for more than $600 million in loans.

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