Crypto firm BlockFi reveals previously unpublished financial information through documents that were accidentally uploaded to the internet. The reports offer an overview of BlockFi's balance sheet and show a $1.2 billion relationship with the crypto empire of Sam Bankman-Fried, who owns FTX and Alameda Research.
These documents, prepared by M3 Partners, adviser to the creditors' committee, show that the company's exposure to FTX was higher than previously disclosed. The files also reveal that BlockFi had 662,427 users, 73% of them with account balances less than $1,000. BlockFi's latest financial documents indicate that the value of assets related to FTX and Alameda Research has been adjusted to $0. According to these reports, after all the adjustments, BlockFi has about $1.3 billion in assets, of which only $668.8 million is available for distribution.
Keeping the horses well fed
Additionally, according to the documents, the remaining 125 BlockFi employees are being paid handsomely as part of a proposed retention plan, to support them through the bankruptcy process. These employees will collect a total of $11.9 million annualized, and among the remaining employees are three customer success employees, who will collect an annualized average of more than $134,000 each. The five remaining employees average $822,834 annually, indicating that BlockFi's retention plans are higher than comparable crypto cases.
BlockFi's first liquidity crisis was triggered by its exposure to Three Arrows Capital, a cryptocurrency hedge fund that filed for bankruptcy in July. FTX had agreed to bail out BlockFi through a $400 million revolving credit facility, but that deal fell through when FTX faced its own liquidity crisis and filed for bankruptcy. Consequently, with the collapse of the SBF empire, BlockFi filed for bankruptcy in November 2022.
Although BlockFi filed for bankruptcy in November, this new information provides a more complete picture of the company's financial situation and its relationship with other companies in the crypto sector. Now, financial documents confirm a significant financial relationship between the crypto firm and Sam Bankman-Fried's crypto empire, through his companies FTX and Alameda Research.