FTX Loan Results in $800 million loss for BlockFi Execs

Paigambar Mohan Raj
Source: Forbes

According to recent filings, BlockFi executives’ share interests were wiped out by an FTX loan from last year. The losses come to a total of $800 million. Following the crypto crash in the summer of 2022, FTX extended a $400 million loan offer to BlockFi. On November 11, FTX filed for bankruptcy, sending shockwaves through the industry. Thirteen of BlockFi’s top executives were affected by the June deal.

Zac Prince, founder and CEO, lost $413 million in equity value. However, Prince received a pay raise of between $250,000 and $400,000 as compensation. Others, meanwhile, reportedly received increased offers of up to $560,000, according to the documents.

Attorneys for BlockFi have emphasized that there were no last-minute withdrawals by key executives from the firm before its collapse. According to the filing, no member of the BlockFi management team took any crypto out of the system after October 14th. The team’s share of the $7.7 billion retail withdrawals for the year was barely 0.15%.

However, the records show that senior management participated in sizeable withdrawals. Prince withdrew approximately $9 million from the site in April. According to the filing, it was done to pay federal and state taxes in the US. Prince also withdrew $870,000 in August.

FTX has money to pay customers?

Attorneys claim that FTX has recovered more than $5 billion in cash and cryptocurrency. This revelation consequently has a significant influence on the number of recoverable assets that the company had when it filed for bankruptcy in November 2022.

The other $425 million that is held by Bahamian officials is not a part of this sum. On the other hand, it continues to be a good development for individuals who may eventually be able to retrieve their assets as a result of the firm’s bankruptcy.

The FTX episode is one for the history books. Moreover, the ongoing investigation and lawsuit could take years to resolve.