The BlockFi logo displayed on a phone screen and a display of cryptocurrencies can be seen in this illustration taken in Krakow, Poland, on November 14, 2022.
Yakub Pazhytsky | Nurphoto | Getty Images
Bankrupt crypto lender BlockFi had more than $1.2 billion in assets linked to Sam Bankman-Fried and Alameda Research’s FTX, according to financials that were previously redacted but mistakenly uploaded unredacted on Tuesday.
FTX’s exposure to BlockFi was greater than previous reports suggested. The company filed for Chapter 11 bankruptcy protection in late November after the collapse of FTX, which agreed to bail out the struggling lender before it collapsed.
The balance shown in BlockFi’s unredacted filing includes $415.9 million in FTX-related assets and $831.3 million in Alameda loans. These are the numbers as of January 14. In November, both Bankman-Frieda firms were declared bankrupt by FTX, sending the crypto market reeling.
BlockFi lawyers previously said Alameda’s loan was valued at $671 million, while additional digital assets worth $355 million were frozen on the FTX platform. Since then, Bitcoin and Ether have rallied, raising the value of those holdings.
The financial presentation was prepared by M3 Partners, advisor to the creditors’ committee. The firm is represented by the law firm Brown Rudnick and consists entirely of BlockFi customers who are owed money by the bankrupt lender.
A lawyer for the creditors’ committee confirmed to CNBC that the unredacted filing was uploaded in error, but declined to comment further. Lawyers for BlockFi did not respond to a request for comment.
Other information currently available regarding BlockFi includes the number of customers and high-level details about the size of their accounts, as well as trading volume.
BlockFi had 662,427 users, of which nearly 73% had a balance of less than $1,000. In the six months from May to November of last year, these clients traded $67.7 million for a combined total of $1.17 billion. According to the presentation, BlockFi generated just over $14 million in trading revenue during that period, an average of $21 per customer.
The company had $302.1 million in cash and $366.7 million in wallet assets. In total, the crypto-lender has nearly $2.7 billion in unadjusted assets, nearly half of which are tied to FTX and Alameda, the presentation shows.
BlockFi’s failure was caused by exposure to Three Arrows Capital, a crypto hedge fund that filed for bankruptcy in July. FTX arranged a rescue plan for BlockFi through a $400 million revolving credit line, but that deal collapsed when FTX faced its own liquidity crisis and quickly went bankrupt.
According to BlockFi’s most recently released financials, the value of Alameda’s receivables and FTX-related assets has been adjusted to $0. After all adjustments, BlockFi has just over $1.3 billion in assets, only $668.8 million of which is described as “Liquid/Distributable.”
BlockFi’s remaining 125 employees are being paid handsomely as part of a proposed retention plan designed to keep some people on board during the bankruptcy process, the filing shows.
Retained employees will receive an annualized total of $11.9 million. The remaining employees include three clients, each of whom will earn an average of more than $134,000 per year.
The five employees still at the company earn an average of $822,834, according to the presentation, which shows that “BlockFi’s retention plans are larger than comparable crypto cases.”
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