BlockFi
Bankrupt crypto lender BlockFi to start creditor repayments in July
Published
2 months agoon
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Defunct cryptocurrency lending platform BlockFi is set to start repaying its creditors in July, 19 months after filing for bankruptcy.
Collapsed crypto lending platform BlockFi will start repaying its creditors in July, nearly two years after the firm filed for bankruptcy amid the dramatic collapse of the FTX crypto exchange.
In an X post on Thursday, the New Jersey-headquartered firm said the distributions will be processed “in batches in the coming months” via Coinbase, adding that eligible clients will receive a notification to the BlockFi account email on file. However, it clarified that non-U.S. clients remain unable to receive funds due to regulatory requirements, with no specified timeline for these repayments.
The distributions will be processed in batches in the coming months, and eligible clients will receive a notification to the BlockFi account email on file. Please note that non-US Clients are unable to receive funds at this time due to the regulatory requirements applicable to…
— BlockFi (@BlockFi) July 17, 2024
For those who are unable to open a Coinbase account, BlockFi earlier assured that all distributions “will be made in cash.”
In March, BlockFi announced it is unlikely to fully repay customers with interest-bearing accounts. The company had previously estimated that these customers might recover between 39.4% and 100% of their account value. The crypto lending giant filed for Chapter 11 protection in November amid market volatility and substantial exposure to the defunct crypto exchange FTX. Less than a year later, BlockFi emerged from bankruptcy and is now working on repaying its creditors.
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Federal Reserve Moves Against Evolve Bank, Is Another Regional Bank Collapse In View?
Published
3 months agoon
June 14, 2024By
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The Federal Reserve has recently delivered a cease and desist order to Evolve Bank and Trust for engaging in “unsafe and unsound banking practices” and having an inadequate AML program. This has focused on the bank, especially given the recent mishaps of the financial technology firms linked with Evolve.
Evolve Bank Scrutinized by Federal Reserve
The cryptocurrency industry and the fintech sectors’ banking service provider, Evolve Bank and Trust, are set to encounter new hurdles after the Federal Reserve’s order. The bank will be required to present detailed proposals for its measures to ensure compliance with the laws on internal and anti-money laundering standards. These directives arise from apparent weaknesses in the bank’s collaborations with fintech firms, especially the recent debacle with Synapse Financial Technologies. This has caused Synapse to have different account balances, impacted fintech clients like Yotta, and added more problems to Evolve’s operations.
It has also benefited from partnerships with major crypto firms such as BlockFi and FTX. These firms have gone through a lot of pressure, and the banks have offered them much-needed financial services. For example, the bankruptcy of FTX provided that FTX had about $10 million in Evolve accounts. Also, Protos and a US Secret Service affidavit reports show that Evolve was also used by the alleged fraudsters in ‘pig-butchering’ scams, which posed another compliance and operations risk to the bank.
Fed Maintains Rates Amid Evolve Bank Issues
These are the problems that occurred at Evolve Bank and Trust. They indicate the more significant issues within the financial services industry regarding the soundness and legal permissibility of banks that are very active in the fintech and cryptocurrency space.
These recent actions by the Federal Reserve depict some of the dangers that can be posed by these partnerships to the financial systems. This way, Evolve deals with the above-listed regulatory issues, and its impact spreads across the entire fintech industry, influencing the customers’ trust and the operational environment of the fintech partners.
The Fed most recently left the benchmark federal funds rate at 5. 25% and 5. 50 % reflects the regulator’s conservative stance, especially on matters related to the economy. Speaking in New York, Federal Reserve Chairman Jerome Powell said that keeping the current interest rate is crucial to support the economic recovery of the United States even with the decrease in inflation rates. This decision aligns with the current measures to guarantee that other financial institutions, such as Evolve, are running within the acceptable standards of safe and sound banking practices.
The regulatory actions against Evolve coincide with significant legislative discussions concerning the role of the Federal Reserve. U.S. Congressman Thomas Massie’s proposed bill to eliminate the Fed reflects a growing sentiment among certain groups advocating for major reforms in the central banking system. This proposal has garnered substantial support from the online Bitcoin community, highlighting the ongoing debate over the future of monetary policy and regulation in the United States.
Also Read: Ripple CLO Criticizes Gensler’s Use of “Crypto Asset Securities”
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Alameda Research
Insights Into Alameda’s Financial Stability In FTX Trial
Published
11 months agoon
October 14, 2023By
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The trial against FTX co-founder Sam Bankman-Fried took an intriguing turn as Zac Prince, the CEO of defunct crypto lender BlockFi, provided testimony in a Manhattan federal courtroom.
Prince’s appearance provided valuable insights into the intricate relationship between BlockFi, FTX, and Alameda Research.
BlockFi’s Bankruptcy Rooted In Alameda And FTX
According to a Bloomberg report, Prince revealed that BlockFi had substantial exposure to Alameda and FTX, estimated at around $1 billion, at the time of BlockFi’s failure in November 2022.
Prince asserted that if the loans to Alameda were still in good standing and the funds on FTX were available, BlockFi would not have filed for bankruptcy. This statement suggests that BlockFi’s financial troubles were closely tied to the collapse of Alameda and FTX.
Prince’s testimony diverged significantly from Caroline Ellison, the government’s star witness, who portrayed Bankman-Fried as the mastermind behind a fraudulent scheme using FTX customer funds for speculative trading at Alameda.
Prince’s account positioned BlockFi as a victim of Bankman-Fried’s alleged schemes, claiming that BlockFi made loans to Alameda based on misleading balance sheets.
Defense lawyers sought to emphasize that BlockFi willingly provided the loans to Alameda, with knowledge of the associated risks.
Creditors Accuse BlockFi Of Inadequate Due Diligence
Prince discussed BlockFi’s due diligence process regarding Alameda’s collateral, comprised of tokens affiliated with FTX. The judge requested plainer terms during Prince’s explanation, prompting an analogy using car loans.
Per the report, the prosecution questioned the adequacy of BlockFi’s due diligence, as creditors accused the company of failing to recognize warning signs before offering substantial loans to Alameda.
Prince’s testimony highlighted that providing “unaudited balance sheets” is an industry norm for borrowers seeking loans. The defense sought to establish that BlockFi knew the risks of lending to Alameda and acted within industry norms.
Zac Prince’s testimony in the trial against Sam Bankman-Fried provided a deeper understanding of the intertwined relationships within the crypto industry. BlockFi’s exposure to Alameda and FTX and its subsequent bankruptcy offered insights into the potential repercussions of alleged fraudulent activities.
The differing narratives presented by the prosecution and defense underscore the complexities of the case. As the trial unfolds, the court will continue to examine the details surrounding BlockFi’s lending practices and the extent of Bankman-Fried’s involvement in the alleged schemes.
It is important to note that BlockFi can no longer be utilized for crypto-related activities, as the company declared bankruptcy and suspended withdrawals in November 2022. The bankruptcy filing indicates that BlockFi owes between $1 billion and $10 billion to over 100,000 creditors.
Featured image from NBC, chart from TradingView.com
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