BlockFi's exposure to FTX appears to be greater than anticipated, however some of this is a result of the current bullishness in BTC. Soon after the FTX Group collapsed, dragging down a substantial number of crypto-related businesses with it, BlockFi, previously shaken by past exposure to 3AC, was compelled to apply for Chapter 11 bankruptcy.
The FTX Group and BlockFi had a mutually beneficial partnership. On the one hand, the exchange had actually given BlockFi a line of credit when it was still struggling after 3AC's demise. The cryptocurrency lender, on the other hand, provided money to Alameda Research and had part of its assets on the FTX platform. When combined, these sums vastly outweigh the maximum amount that FTX could have lent to BlockFi.
More than $1.2 Billion Linked to SBF's Companies
The value of BlockFi's debts and investments with the FTX Group grew in comparison to the value mentioned in the initial bankruptcy petition due to the recent rebound of Bitcoin. BlockFi assets worth a total of $415.9 million are presently locked in FTX's accounts, according to the leaked data. Alameda received a loan for an additional $831.3 million worth of now-frozen assets, bringing the total to a staggering $1.2 billion that BlockFi is unable to access in order to repay creditors.
In fact, SBF's firm Emergent Fidelity Technologies Ltd, which was created to store his Robinhood shares, has been sued by the lender. These shares, which SBF is attempting to sell to pay for his legal defense at the expense of FTX creditors, were purportedly staked as security for a portion of BlockFi's assets provided to the FTX Group.
Users' Holdings Data from a Released Document
The document that was leaked, created by M3 Partners for demonstrational reasons, was initially intended to be edited before being made available to the public. Thankfully, the paper does not include any details on individual BlockFi customers.
Nevertheless, it does provide crucial information from a bird's eye perspective on creditor deposits, showing that BlockFi had 662,427 clients at the time of its bankruptcy.
73% of accounts had assets worth no more than $1,000 while 20% had assets valued between $1,000 and $10,000. Less than 1% of BlockFi customers had $250k or more in their wallets, and about 1% of clients had balances between $50k and $250k.
Fortunately, the leaked report also includes data on cumulative trade volumes, accounts, and activity without disclosing the identities of specific users, but with enough work, this information may be inferred for the higher levels. The plan for BlockFi's bankruptcy proceedings is to keep the network afloat and, if at all feasible, emerge from bankruptcy greater than before.
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