1 year ago
Zac Prince, the CEO of BlockFi, continued to supply grounds successful the transgression proceedings of erstwhile FTX CEO Sam Bankman-Fried connected Oct. 13.
In the erstwhile day’s testimony, Prince described his firm’s lending relationship with Alameda Research. In existent testimony, helium described however Alameda began to predominate BlockFi lending activities and noted that helium spoke to FTX and Alameda arsenic loans grew larger.
Prosecutors: “Did you speech with Sam Bankman-Fried?”
Prince: “Yes, a CEO to CEO was suggested. So we did a call.”
Prince said that BlockFi had astatine 1 constituent lent retired $5 cardinal to $10 cardinal to its clients overall. Alameda Research had initially borrowed $10 cardinal circa aboriginal 2021, but that magnitude yet roseate to $50 cardinal successful May 2021 and to $1.1 cardinal successful May 2022.
The BlockFi enforcement noted that his steadfast was besides affected by different manufacture events, including the illness of Luna and TerraUSD (which was followed by Three Arrows Capital’s default connected its indebtedness to BlockFi) arsenic good arsenic the bankruptcy of Celsius and Voyager.
Prince said that BlockFi, astatine 1 point, attempted to person FTX get it, arsenic reported successful mid-2022. Though the acquisition ne'er occurred, Prince admitted that the statement with FTX influenced BlockFi’s determination to lend wealth to Alameda arsenic a “data point.” He did not admit that BlockFi loaned to Alameda wholly due to the fact that of that arrangement.
BlockFi was unaware of FTX’s wrongdoing
Prosecutors past presented Prince with Alameda’s Q2 2022 equilibrium sheet. Though Prince was acquainted with it, helium said that helium was told the loans elaborate connected the expanse were from different crypto lenders, arsenic opposed to loans betwixt FTX and Alameda.
Prince said that if helium had known of FTX’s multibillion-dollar loans to Alameda, BlockFi would not person lent wealth to Alameda arsenic it “would person been insolvent.” He added that if helium had known that Alameda was utilizing wealth that belonged to FTX customers, BlockFi would not person lent wealth arsenic that signifier is “not appropriate.”
Furthermore, Prince said that if helium had known of Alameda’s loans to Sam Bankman-Fried, BlockFi would person been “concerned.” Early bankruptcy reports suggest that Bankman-Fried personally borrowed astatine slightest $1 cardinal from Alameda.
Prince besides testified that erstwhile the terms of FTX’s FTT token fell astir the clip of the companies’ collapses, BlockFi attempted to telephone definite loans.
Prince said that, astatine the clip of the collapse, $650 cardinal of loaned funds were inactive outstanding and said that BlockFi had $350 cardinal connected FTX, leaving $1.1 cardinal affected. He testified that Alameda and FTX led to BlockFi’s ain bankruptcy.
Cross-examination addresses finer points
During cross-examination, Bankman-Fried’s lawyer seemingly attempted to gully attraction to the information that some BlockFi and FTX lent retired lawsuit assets. Prince emphasized that BlockFi lent lawsuit funds “if they agreed to.”
Also during that period, Cohen asked Prince whether BlockFi’s squad had advised against expanding vulnerability to FTT tokens. Prince replied that the full squad had not advised this and said that BlockFi had made much loans erstwhile it required much collateral.
Earlier, Prince had noted BlockFi had received Grayscale Trust and Robinhood shares arsenic collateral. Cohen asked whether Prince was alert of who owned those Robinhood shares. Prince replied that helium “wasn’t alert of the nuances.” Robinhood recently purchased those shares from the U.S. authorities aft they were seized from Bankman-Fried. In precocious 2022, BlockFi had attempted to laic claim to the shares itself.
Finally, Cohen asked whether Prince was ever acrophobic astir whether BlockFi mightiness spell bankrupt. Prince answered that a CEO “must deliberation of possibilities.”
Cohen’s cross-examination concluded astatine that point. The proceedings volition proceed adjacent week, with FTX associates Nishad Singh and Ramnik Arora providing testimony.
The station BlockFi CEO Zac Prince testifies to lending narration with Alameda Research earlier its collapse appeared archetypal connected CryptoSlate.
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