BlockFi Creditors Say Crypto Lender Was a Victim of Bad Management
BlockFi Creditors Say Crypto Lender Was a Victim of Bad Management
As stated late Monday, a dispute between the BlockFi Committee Creditors and the bankrupt cryptocurrency lender's administration sparked a court filing.
The committee cited the firm's statement of becoming the victim of both FTX and Alameda crackdown as a "false case statement," accusing the company's lack of proper management rulings, especially its restructuring agents.
According to the creditor's board, BlockFi's $240 million crypto-to-fiat conversion resulted in catastrophic financial losses and potential tax allegations of customers after the FTX fell.
The lending firm deposited $10 million into Silicon Valley Bank (SVB) to recover its losses. However, it suffered further financial casualties following the collapse of the private banking firm.
Despite the charges, nobody at BlockFi's restructuring group turned their heads and stated that it was good that the Federal Government defended SVB depositors and BlockFi itself.
The lenders also argued that BlockFi used $22.5 million of its customers' holdings to acquire a $30 million insurance policy for its executives and officials. In addition, the creditors also conceded that they suffered a $100 million value loss due to a poor liquidation decree.
A portion of the document is amended, particularly critical statements that further pushed the creditor's belief that the BlockFi team is under the "false case narrative."
After the declining domino effect from FTX's fall down, the lending firm looks to distribute nearly $300 million to its customer's wallets as they maintain $375 million from its money market account.
BlockFi's significant recoveries stem from the $1 billion ties with FTX and Alameda, around $355 million frozen on FTX, and a $671 million loan on Alameda.
