BlockFi Files Decrypted! FTX Offered Settlement and Legal Fees of 15 Million, CEO Withdrew Nearly 10 Million After 400 Million Loan

The lending yield platform BlockFi was financially impacted by Three Arrows Capital, previously borrowing $400 million through FTX in July 2022, facing difficulties. However, due to FTX's bankruptcy, BlockFi also declared bankruptcy and reorganization on November 28, 2022. Currently, BlockFi has revealed details of the management team, the "withdrawal situation" after borrowing $400 million, and the lawsuit financial support from FTX during the reorganization process.

BlockFi expects to file both its Schedules of Assets and Liabilities and its Statement of Financial Affairs with the Court on January 11, 2023.

— BlockFi (@BlockFi) January 9, 2023

FTX Borrowed 400 Million, Top Executives Successfully Withdrew Funds

After borrowing $400 million on July 1, 2022, FTX disclosed in documents the balances in BlockFi accounts of the management team at the end of each month until the platform ceased operations. For example, CEO Prince successfully withdrew nearly $10 million from the end of July to 11/21. This has sparked public discussion as some believe that the management team is also withdrawing funds in a financially challenging situation.

According to BlockFi, from the beginning of 2022 until the platform ceased operations, the funds withdrawn by the management team and retail investors totaled $7.7 billion, accounting for 0.15%.

FTX Previously Provided $15 Million in Financial Assistance for Out-of-Court Settlement

In June 2022, BlockFi faced a lawsuit, and by August of the same year, a settlement was reached out of court through a confidential agreement, with approximately $15 million in funding provided by FTX.

The settlement funds were transferred from FTX to various accounts of top executives and then to the opposing party in the settlement. It is alleged that the BlockFi executives did not hold these funds and were required to pay taxes on them.