Fun

News Feed - 2023-07-15 05:07:00

Turner Wright4 hours agoBlockFi CEO ignored risks from FTX and Alameda exposure, contributing to collapse: Court filingCrypto lending firm BlockFi had roughly $1.2 billion in assets tied to FTX and Alameda Research when the firm filed for bankruptcy in November 2022.941 Total views8 Total sharesListen to article 0:00NewsJoin us on social networksZac Prince, the CEO of bankrupt cryptocurrency lending firm BlockFi, allegedly disregarded recommendations from the company’s risk management team over lending assets to Alameda Research. 


According to a July 14 filing with the United States Bankruptcy Court for the District of New Jersey by the unsecured creditors’ committee, BlockFi’s risk management team reported on the “high risks” associated with lending assets to Alameda. Prince allegedly dismissed concerns from the team on BlockFi lending Alameda $217 million by August 2021. The team suggested there could be risks if the FTX Token (FTT) used to secure the loans needed to be liquidated.


“As early as August 2021, BlockFi’s risk management team was advised that Alameda’s balance sheet was largely comprised of ‘~7bb unlocked FTT, and 11bb total including locked tokens based on unaudited financials,’” said the filing. “This set off alarms at BlockFi. Mr. Prince dismissed the concerns, urging the risk team to learn to ‘get comfortable [with Alameda] being a three arrows size borrower, just with FTT and other collateral types instead of GBTC shares.’”


After January 2022, the risk management team stopped issuing memos to Prince on the potential risks of giving loans to Alameda, moving discussions to “offline meetings and Slack,” where the CEO occasionally acknowledged the exposure. BlockFi had roughly $1.2 billion in assets tied to FTX and Alameda when the firm declared bankruptcy.pic.twitter.com/zNF1uP6evl— BlockFi (@BlockFi) November 11, 2022


Related:BlockFi plans to file assets and liabilities for bankruptcy case on Jan. 11


At the time of its Chapter 11 filing in November 2022, BlockFi said it had “significant exposure” to FTX and its associated entities. FTX US received a $400 million credit line from BlockFi in July 2022, furthering financial ties between the two firms amid a crypto winter.


“BlockFi recalled its loans from Alameda [in June 2022], and Alameda repaid its outstanding balance to almost zero,” said the report. “BlockFi then could have walked away from the relationship. Instead, it re-lent Alameda nearly $900 million (between July and September 2022), almost exclusively collateralized by FTT.”


The filing added:“It may be true that Alameda/FTX’s downfall triggered BlockFi’s downfall, but BlockFi’s demise was rooted in business practices and decisions well preceding Alameda/FTX’s bankruptcy filing.”


In a statement to Cointelegraph, a BlockFi spokesperson said the firm disagreed with the report. The firm alleged in a separate court filing the committee behind the report “cherry-picks statements out of context, errs on other matters, and does not deliver the objective analysis promised.”


BlockFi directly cited exposure to FTX in the reasons for its bankruptcy filing. FTX’s practice of collateralized loans based on FTT tokens left many firms holding the bag after the price of the token dropped from more than $25 to under $2 amid the Chapter 11 filing and reported liquidity issues.


Magazine:Can you trust crypto exchanges after the collapse of FTX?# Business# Bankruptcy# Cryptocurrency Exchange# Court# FTXAdd reactionAdd reactionRelated NewsWhat are fan tokens, and how do they work?BlackRock Bitcoin ETF could unlock $30 trillion worth of wealth, Bloomberg analyst saysIt’s time for the SEC to settle with Coinbase and RippleFTX bankruptcy will be ‘very expensive’ but for a reason: AuditorJudge blocks Bankman-Fried’s attempt to obtain key documents in fraud prosecution: ReportFTX splurged on cartoon, book about humans and ‘Pineapple House,’ alleges CEO

News Feed

Arijit Sarkar30 minutes agoBlackBerry reveals top crypto-focused malware amid rising cyber threatsSmokeLoader, RaccoonStealer (also known as RecordBreaker) and Vidar top the charts, according to BlackBerry’s list.252 T
Mozaic Finance hacked for $2.4M via private key compromise
Christopher Roark3 hours agoMozaic Finance hacked for $2.4M via private key compromiseThe yield farming app was exploited through a possible private key compromise, according to a CertiK report.823 Total views28 Total sh
Uganda Central Bank Says It Is Open to Crypto Firms Participating in Regulatory Sandbox
Uganda Central Bank Says It Is Open to Crypto Firms Participating in Regulatory Sandbox The Bank of Uganda (BOU) has hinted that it is open to the idea of crypto firms participatin
International Operation Disrupts Ransomware Group Netwalker by Tracing Cryptos With the Help of Blockchain Analysis
International Operation Disrupts Ransomware Group Netwalker by Tracing Cryptos With the Help of Blockchain Analysis In collaboration with Bulgarian authorities,
South African Cryptocurrency Ownership Rate at 10% — Report
South African Cryptocurrency Ownership Rate at 10% — Report With a cryptocurrency ownership rate of 10%, or four million people, South Africa “ranks 18th out of 26 countri
AuroraFS DApps Development Capabilities to Be Enhanced
AuroraFS DApps Development Capabilities to Be Enhanced press release PRESS RELEASE.Recent news reveals that AuroraFS has progressed in its vision and direction concerning the develo
Southeast Asia’s Largest Bank DBS Unveils Plan to Expand Crypto Services in Hong Kong
Southeast Asia"s Largest Bank DBS Unveils Plan to Expand Crypto Services in Hong Kong DBS, the largest bank in Southeast Asia, has unveiled its plan to expand its crypto services i
Tom Mitchelhill31 minutes agoJudge rejects SEC’s motion to file an appeal against Ripple rulingDistrict court judge Analisa Torres denied the SEC"s motion to file an appeal, claiming that the regulator did not show tha
Helen Partz14 hours agoKuCoin crypto exchange to introduce mandatory KYC in JulyKuCoin’s Know Your Customer checks will require new users to complete identity verification to access all services, while existing non-KYC
How Penguin Karts Will Drive The Blockchain Gaming Scene Forward
How Penguin Karts Will Drive The Blockchain Gaming Scene Forward sponsored A lot has happened since the idea of Penguin Karts was first conceived. Who would have thought that a nost
Arijit Sarkar8 minutes agoJamaican taxi drivers bullish on accepting Jam-Dex CBDCJam-Dex would be significantly transformative for the public transportation sector and needs to be embraced, believes Aldo Antonio, co-foun
Ripple CEO Warns of Harm to Crypto Industry if SEC Wins Lawsuit Over XRP
Ripple CEO Warns of Harm to Crypto Industry if SEC Wins Lawsuit Over XRP The CEO of Ripple Labs has warned of the harm to the crypto industry if the U.S. Securities and Exchange Co