Aaryamann Shrivastava
FXStreet
- BlockFi stated that it had disclosed accurate information to the bankruptcy court.
- The crypto lender was earlier reported to have only a $1 billion exposure to the bankrupt cryptocurrency exchange.
- BlockFi has been dealing with its bankruptcy by planning to sell $160 million in Bitcoin mining loans.
BlockFi was among the handful of companies that were the most impacted by the collapse of the cryptocurrency exchange FTX. The crypto lender ended up filing for bankruptcy weeks after FTX and has since been only attempting to do right by its customers, claiming the whole process to be nothing but transparent.
BlockFi and FTX
While the cause certainly was the market crash that FTX’s downfall ensued, BlockFi and the exchange had a connection of their own. The two companies have been connected to each other since June last year when FTX attempted to acquire BlockFi. BlockFi is also among the largest creditors of the bankrupt crypto exchange.
According to previous understanding, BlockFi only had about $1 billion exposure to FTX and Alameda Research. However, recent reports and court documents of the exposure being $200 million higher surfaced, forcing BlockFi to clarify.
As the community started calling BlockFi out for not being truthful about their financial standing, the crypto lender stated that calling the figures “secret financials” was wrong. A representative of the company wrote to CNBC that the company prioritized transparency and that,
“BlockFi has disclosed accurate information to the Court as part of our Statement of Financial Affairs, which was filed on January 12, 2023.”
BlockFi continues fighting
BlockFi’s bankruptcy proceedings are advancing on one hand, on the other, the crypto lender’s Chief People Officer is seeking higher salaries for its employees. Requesting the court, the company stated that many employees had already left for Google and other companies, asking the court to increase salaries to prevent further resignations.
Furthermore, the company is also looking to sell Bitcoin mining machine-backed loans to users by using its 68,000 mining rigs. This would allow the company to sell up to $160 million in loans, which are expected to be undercollateralized due to the decline in prices of the mining machines.
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