• Sat. Apr 13th, 2024

Reports Are Coming In Claiming BlockFi Has Exposure Of $1.2 Billion With FTX

Summer White

BySummer White

Jan 25, 2023

BlockFi has become a major topic among major businessmen as well as the entire cryptocurrency industry after a few claims have come to light.

It is being claimed that BlockFi has several funds stuck at two major cryptocurrency firms that have now gone bankrupt.

As per the claims, BlockFi has its funds stuck on the FTX exchange and Alameda Research. Both were sister companies and the couple filed for bankruptcy back in November 2022.

It is shocking news for all those who have been part of BlockFi as a platform to store their funds and carry out transactions. The investors did not know that the firm had so much stuck at those two companies.

Funds Stuck on the Bankrupted Firms

The claims have revealed that BlockFi had $416 million worth of assets exposed to the FTX exchange. Whereas, the vast majority of their funds were exposed to Alameda Research.

The crypto trading/lending firm has revealed that it has $800 million worth of assets exposed to Alameda Research.

It is worth noting that both firms are now bankrupt. This means that it is currently impossible to get the funds out of them until the court makes a decision and announces the verdict.

M3 Partners, the creditor committee adviser was the one responsible for compiling the report and presenting it with all the facts and figures.

The data that M3 Partners collected was on January 14, 2023, so the figures were valid until the particular date.

BlockFi is trying to defend itself

The initial report that was shared by BlockFi revealed that a total of $671 million were owed by Alameda Research to the loaning firm.

Apart from the $671 million funds, $350 million were owed by the FTX exchange, and these funds were stored in the form of cryptocurrency assets.

The firm later communicated that these funds were frozen just as they went bankrupt. The firm claims that it was completely transparent in sharing its report and the money both entities owed them.

Therefore, there is a possibility that the surge in the trading price of the assets is the cause that has pumped the owed amounts by these firms.

The reports shared by the reporting firms claim that as of mid-January 2023, BlockFi had around $367 million worth of funds stored in the crypto wallets. The firm also has $300 million on hand in the form of cash.

It has been confirmed that most of the firm had were in the form of assets valued at $1.3 billion. The sources have also claimed that half of the $1.3 billion funds are mainly liquid.

While the reporting firms are claiming they have gathered information from very authentic/reliable sources, BlockFi is standing its ground.

It is claiming that it has remained fully transparent with its funds and assets, so what they have shown is correct.

The firm also had to file for bankruptcy in the same month as FTX and Alameda Research. The funds it had stored with both of the firms were enormous and there was no way for the firm to recover them.

Therefore, it had no choice but to proceed with filing bankruptcy and that is what it did back in November 2022. It proceeded with filing for Chapter 11 bankruptcy.

Crypto Regulators are Not Going to Sit Still

The crash of the FTX brand was the last straw for the cryptocurrency industry before the regulators would come raining down on the sector.

They have increased their pressure and scrutiny over any firm from the cryptocurrency industry they have the slightest of doubts about their operations.

They are not taking things lightly and are ready to take very strict actions against those who are found responsible for scamming people.

This puts BlockFi in a bad situation as many claims that the firm was misusing the funds belonging to the users.

Summer White

Summer White

Summer White, an esteemed writer for Big Trends Signals, combines her online trading expertise and articulate writing to deliver exhaustive guides and fair reviews, assisting traders in digital markets.

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