The BlockFi logo displayed on the phone screen and the representation of cryptocurrencies are seen on this illustrative photo taken in Krakow on November 14, 2022.
Jakub Porzycki | Nurphoto | Getty’s paintings
Bankrupt cryptocurrency lender BlockFi had greater than $1.2 billion in assets related to Sam Bankman-Fried and Alameda Research’s FTX, according to financial data previously redacted but mistakenly submitted unedited Tuesday.
BlockFi’s exposure to FTX was greater than previous disclosures had suggested. The corporate filed for Chapter 11 bankruptcy protection in late November after the collapse of FTX, which agreed to save the struggling lender from its own meltdown.
The balance shown within the unedited BlockFi filing includes $415.9 million in assets related to FTX and $831.3 million in loans to Alameda. These figures are from January 14. Each Bankman-Fried firms were embroiled in November’s FTX bankruptcy, sending shockwaves through the crypto markets.
BlockFi lawyers previously said the loan to Alameda was valued at $671 million, while the FTX platform had an extra $355 million frozen in digital assets. Since then, Bitcoin and ether have gone up, adding value to these resources.
The financial presentation was prepared by M3 Partners, an advisor to the creditors’ committee. The corporate is represented by law firm Brown Rudnick and is made up entirely of BlockFi clients to whom the bankrupt lender owes money.
A lawyer for the creditors’ committee confirmed to CNBC that the unredacted filing was submitted in error, but declined to comment further. BlockFi’s attorneys didn’t respond to a request for comment.
Other information currently available on BlockFi includes the variety of clients and details of their account size in addition to trading volume.
BlockFi had 662,427 users, nearly 73% of whom had an account balance of lower than $1,000. Within the six months from May to November last 12 months, these clients recorded a cumulative trading volume of $67.7 million, while the full volume was $1.17 billion. BlockFi earned just over $14 million in trading revenue through the period, averaging $21 in revenue per customer, according to the presentation.
The corporate had $302.1 million in money in addition to portfolio assets of $366.7 million. All in all, the cryptocurrency lender has unadjusted assets of nearly $2.7 billion, nearly half of that are related to FTX and Alameda, because the presentation shows.
BlockFi’s demise was precipitated by its exposure to Three Arrows Capital, a cryptocurrency hedge fund that filed for bankruptcy protection in July. FTX arranged a rescue plan for BlockFi through a $400 million revolving credit facility, but that deal fell apart when FTX faced its own liquidity crisis and quickly went bankrupt.
According to BlockFi’s latest published financial data, the worth of each the Alameda loan receivable and FTX-related assets has been adjusted to $0. In spite of everything adjustments, BlockFi has just $1.3 billion in assets, of which only $668.8 million is described as “liquid/distributable.”
Files show that the 125 remaining BlockFi employees are being paid handsomely under a proposed retention plan designed to keep some people on board through the bankruptcy process.
The detained employees will collect a complete of $11.9 million a 12 months. Among the many remaining employees are three customer success employees, each of whom will take home a median of over $134,000 per 12 months.
The five employees still working at the corporate earn a median of $822,834, according to a presentation that shows BlockFi’s retention plans are larger than comparable crypto cases.
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