Block.One Founder Lost Over $70 Million Due To Holding Silvergate Stock

Key Points:

• Brendan Blumer, the founder of EOS and Block.One, spent nearly $90 million to acquire 9.27% of Silvergate shares.
• Blumer has lost at least $74 million personally.
• Silvergate was well-known as a significant bank for FTX and Alameda Research.

According to Protos reports, Brendan Blumer, the founder of EOS and Block.One, had previously spent more than $90 million to purchase about 9.27% of Silvergate’s stock.

For regulatory purposes, Brendan Blumer had previously admitted that he was the owner of all 9.27 % of the stock benefits everyone, but as Silvergate’s stock price plummeted, his personal floating loss has reached at least $74 million.

Dan Larimer, Brock Pierce, and Blumer established Block.One in 2017. At the height of the initial coin offering (ICO) boom, the firm raised a substantial sum of money.

Blumer was mentioned as a passive investor in the newsletter Block.One and Blumer investments. Silvergate is well known as a key bank for FTX and Alameda Research. What’s special is that FTX filed for bankruptcy five days before Blumer’s investment.

According to other data, as of November 16, 2022, Block.One owns approximately 7.5% of Silvergate, and he owned the 1.7% balance listed on the SEC filing.

In June 2017 and June 2018, Block.One claimed to have sold over $4 billion in EOS tokens. Yet, according to US government researcher John Griffin, the majority of that money is the result of wash trading.

In 2019, the company paid a $24 million fine to the Securities and Exchange Commission (SEC) to resolve a civil case for selling unregistered securities.

Blumer announced ambitions to grow the EOS ecosystem and invest in EOS-related firms in an interview following the SEC punishment.

In addition, the firm encountered legal issues, including an investor lawsuit alleging that it launched a counterfeit ICO.

As many other banks turn away consumers, Silvergate Capital has built a reputation as a digital asset-friendly bank. It was Blumer who invested in Silvergate at the time even though the FTX troubles began to spread.

EOS began as an exciting blockchain. But, by the end of 2021, the value of EOS had plunged. It was scarcely utilized outside of a few popular apps.

It was blamed on Block.One for bringing it down. One community member may have mentioned Block.One and Blumer’s ownership of a major interest in Silvergate Capital is an example of the firm deviating from its pledge to invest preeminently in EOS-based ventures.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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