During his testimony at Sam Bankman-Fried’s trial, BlockFi CEO Zac Prince squarely pointed the finger at FTX crypto exchange and its affiliate, Alameda Research, for the collapse of his firm, media reports said.
Prince asserted that had he been aware of false balance sheets, BlockFi would never have extended funds. Notably, BlockFi held $1.1 billion on the FTX exchange, and when questioned about the bankruptcy declaration, Prince attributed it to Alameda and FTX. When asked whether BlockFi would have lent funds to Alameda knowing it used FTX customer funds, Prince emphatically responded, “No. That is not appropriate.” Despite BlockFi calling some loans, a substantial $650 million remained outstanding.
Prince disclosed that Grayscale Trust and Robinhood were posted as collateral. The trial, now concluding its second week, centers on allegations against former FTX CEO Bankman-Fried, including fraud and the misuse of customer assets for failed investments.
FTX had filed for bankruptcy protection last year, with BlockFi following suit in November 2022. Major creditors for BlockFi included FTX.US and the Securities and Exchange Commission.
Currently undergoing the bankruptcy process, BlockFi issued a statement urging eligible parties to vote for the bankruptcy plan by the September 11 deadline. BlockFi aims for a fair and value-maximizing conclusion to promptly return client funds.
