Menu Close

BlockFi Tries to Stay Afloat After $1.2B Exposure to Failed Ventures

• BlockFi has had a tumultuous 12 months, narrowly avoiding bankruptcy after receiving a $400 million lifeline in July 2022.
• According to leaked financials, BlockFi has $1.2 billion in assets tied up in Sam Bankman-Fried’s failed companies FTX and Alameda Research.
• BlockFi is reportedly selling $160 million in Bitcoin miner-backed loans.

BlockFi has had a rollercoaster of a year. After getting caught up in the Terra fiasco, the company was almost bankrupt until it received a $400 million lifeline from FTX US in July 2022. Unfortunately, that same lender was then embroiled in its own scandal, and BlockFi was still left holding the bag. This week, confidential financials have been leaked which show exactly how much exposure BlockFi has to Sam Bankman-Fried’s failed enterprises.

The leaked financials show that BlockFi had $315.9 million worth of assets linked to FTX and $831.3 million in loans to Alameda Research as of Jan. 14. That adds up to a total of $1.2 billion, representing a huge portion of BlockFi’s total assets. Despite the company’s efforts to distance itself from Bankman-Fried’s companies, it turns out they are still inextricably linked.

The financials also reveal that BlockFi is selling $160 million worth of Bitcoin miner-backed loans. This is a highly unusual move, as Bitmain, the Chinese firm that owns the underlying assets, is currently embroiled in a legal dispute with BlockFi. However, the company believes that the sale is necessary in order to remain solvent and continue to offer its services to customers.

Furthermore, the leaked documents show that BlockFi is looking to launch a new crypto asset called the Celsius token. The company is hoping to use this token to reward customers for their loyalty and to offer new products and services. However, the fate of the Celsius token is still uncertain, and it remains to be seen if it will ever see the light of day.

Finally, the documents also reveal that BlockFi is in the middle of a high-profile funding deal with a major blockchain firm. Details of the deal remain confidential, but analysts are speculating that the firm will receive a sizeable injection of capital which could help it to regain its footing.

Overall, these leaked financials have shed more light on BlockFi’s financial situation, revealing just how much exposure the company has to Sam Bankman-Fried’s failed companies. While the company is still in a precarious position, it is making moves to remain solvent and to offer new products and services to its customers. Whether or not these efforts will be enough to save BlockFi remains to be seen.