BlockFi Shows How to Collapse ‘The Right Way’
BlockFi, another crypto lender, was forced to declare bankruptcy because of Alameda Research. That’s the story BlockFi CEO Zac Prince told when he took the stand in SBF’s trial. BlockFi loaned Alameda Research billions of dollars, but never got all of it back, forcing Prince’s company into bankruptcy.
Prince’s testimony was notable because BlockFi explicitly told customers in more ways than one that it was lending and investing with customer funds. That’s a key distinction between BlockFi and FTX. There’s nothing illegal about investing customer dollars—that’s how banks make a profit—but exposing customers to risk without telling them of potential fraud.
