BlockFi Had Undisclosed $1.2B Tie To FTX: Report

Bankrupt crypto firm BlockFi reportedly had over $1.2 billion in assets tied to FTX.

That means the digital asset lender’s exposure to FTX and its companies was greater than earlier disclosures suggested, CNBC reported Tuesday (Jan. 24), citing company financials that were mistakenly uploaded.

In response to a request for comment, BlockFi provided PYMNTS with this statement: “BlockFi has disclosed accurate information to the Court as part of our Statement of Financial Affairs, which was filed on January 12, 2023. Throughout the chapter 11 process, BlockFi has prioritized transparency and stating that these numbers are ‘secret financials’ is inaccurate.”

BlockFi filed for bankruptcy protection in November after pausing activity on its site. That decision came in the wake of the downfall of FTX, its one-time benefactor.

Read more: FTX Prosecutors Seize $698M In Bankman-Fried Assets

Earlier in the year, BlockFi — once valued at $3 billion before last year’s “crypto winter” set in — had been faced with a solvency crisis as crypto prices plunged, leading the company to accept a $400 million lifeline from FTX.

BlockFi used those funds — a revolving credit facility — to fix its balance sheet and extended millions of loans that used FTX’s FTT tokens as collateral.

According to CNBC, the balance sheet the company mistakenly filed includes $415.9 million worth of assets connected to FTX and $831.3 million in loans to Alameda Research, another firm launched by FTX founder Sam Bankman-Fried.

The report says that BlockFi’s attorneys had previously said the loan to Alameda was valued at $671 million, with another $355 million frozen on the FTX platform.

Since FTX’s bankruptcy last year and the criminal proceedings against Bankman-Fried that followed, BlockFi has sought to recover funds from FTX.

The company sued Bankman-Fried just after filing for bankruptcy in hopes of recovering shares in trading firm Robinhood.