Zac Prince, the CEO of BlockFi, continued to offer testimony within the legal trial of former FTX CEO Sam Bankman-Fried on Oct. 13.
In the day gone by’s testimony, Prince described his agency’s lending relationship with Alameda Analysis. In present testimony, he described how Alameda started to dominate BlockFi lending actions and famous that he spoke to FTX and Alameda as loans grew bigger.
Prosecutors: “Did you speak with Sam Bankman-Fried?”
Prince: “Sure, a CEO to CEO was instructed. So we did a name.”
Prince mentioned that BlockFi had at one level lent out $5 billion to $10 billion to its shoppers general. Alameda Analysis had initially borrowed $10 million circa early 2021, however that quantity ultimately rose to $50 million in Might 2021 and to $1.1 billion in Might 2022.
The BlockFi govt famous that his agency was additionally affected by different business occasions, together with the collapse of Luna and TerraUSD (which was adopted by Three Arrows Capital’s default on its mortgage to BlockFi) in addition to the chapter of Celsius and Voyager.
Prince mentioned that BlockFi, at one level, tried to have FTX purchase it, as reported in mid-2022. Although the acquisition by no means occurred, Prince admitted that the association with FTX influenced BlockFi’s determination to lend cash to Alameda as a “knowledge level.” He didn’t admit that BlockFi loaned to Alameda wholly due to that association.
BlockFi was unaware of FTX’s wrongdoing
Prosecutors then introduced Prince with Alameda’s Q2 2022 stability sheet. Although Prince was acquainted with it, he mentioned that he was advised the loans detailed on the sheet had been from different crypto lenders, versus loans between FTX and Alameda.
Prince mentioned that if he had identified of FTX’s multibillion-dollar loans to Alameda, BlockFi wouldn’t have lent cash to Alameda because it “would have been bancrupt.” He added that if he had identified that Alameda was utilizing cash that belonged to FTX prospects, BlockFi wouldn’t have lent cash as that observe is “not acceptable.”
Moreover, Prince mentioned that if he had identified of Alameda’s loans to Sam Bankman-Fried, BlockFi would have been “involved.” Early chapter experiences counsel that Bankman-Fried personally borrowed a minimum of $1 billion from Alameda.
Prince additionally testified that when the value of FTX’s FTT token fell across the time of the businesses’ collapses, BlockFi tried to name sure loans.
Prince mentioned that, on the time of the collapse, $650 million of loaned funds had been nonetheless excellent and mentioned that BlockFi had $350 million on FTX, leaving $1.1 billion affected. He testified that Alameda and FTX led to BlockFi’s personal chapter.
Cross-examination addresses finer factors
Throughout cross-examination, Bankman-Fried’s lawyer seemingly tried to attract consideration to the truth that each BlockFi and FTX lent out buyer belongings. Prince emphasised that BlockFi lent buyer funds “in the event that they agreed to.”
Additionally throughout that interval, Cohen requested Prince whether or not BlockFi’s staff had suggested towards rising publicity to FTT tokens. Prince replied that your complete staff had not suggested this and mentioned that BlockFi had made extra loans when it required extra collateral.
Earlier, Prince had famous BlockFi had obtained Grayscale Belief and Robinhood shares as collateral. Cohen requested whether or not Prince was conscious of who owned these Robinhood shares. Prince replied that he “wasn’t conscious of the nuances.” Robinhood not too long ago bought these shares from the U.S. authorities after they had been seized from Bankman-Fried. In late 2022, BlockFi had tried to put declare to the shares itself.
Lastly, Cohen requested whether or not Prince was ever involved about whether or not BlockFi may go bankrupt. Prince answered {that a} CEO “should consider prospects.”
Cohen’s cross-examination concluded at that time. The trial will proceed subsequent week, with FTX associates Nishad Singh and Ramnik Arora offering testimony.
