Crypto Biz: A peek into BlockFi’s secret financials (it’s not pretty)

How much exposure does BlockFi have to Sam Bankman-Fried failed enterprises? A lot, according to accidentally leaked financials.

Crypto lender BlockFi has had a highly tumultuous 12 months. After getting caught up in the Terra fiasco, which resulted in one of the most prolific asset death spirals of all time, the company managed to avoid bankruptcy after receiving a $400 million lifeline in July 2022. The problem? Its lender was FTX US, and we all know what happened next.

Although BlockFi has attempted to separate itself from Sam Bankman-Fried’s fraud in the aftermath of FTX’s collapse, its secret financials tell a different story.

This week’s Crypto Biz delves into BlockFi’s uncensored financials, the likelihood of “Celsius token” ever seeing the light of day and the latest high-profile funding deal in blockchain.

Breaking: BlockFi uncensored financials reportedly shows $1.2B FTX exposure

Just how bad are BlockFi’s financials? For starters, the bankrupt crypto lending firm reportedly has $1.2 billion in assets tied up in Sam Bankman-Fried’s failed companies — FTX and Alameda Research, to be specific. According to CNBC, BlockFi made these details public by accident, adding insult to injury. Nevertheless, the documents show that the company had $315.9 million worth of assets linked to FTX and $831.3 million in loans to Alameda as of Jan. 14. Although BlockFi has attempted to separate itself from SBF’s companies, it looks like it’ll continue to circle the same drain as FTX and Alameda.

BlockFi to sell $160M in Bitcoin miner-backed loans: Report

BlockFi is reportedly looking to sell $160 million in loans backed by 68,000 Bitcoin (BTC) miners as part of its bankruptcy proceedings. That sounds like a good strategy to raise liquid funds, right? Unfortunately, some of these loans have already defaulted and are likely undercollateralized following Bitcoin’s year-long bear market. A legal expert interviewed by Cointelegraph cautioned that the loans are probably “not worth their paper value anymore.” Let’s hope for BlockFi’s sake that the value of the mining equipment used in the collateral isn’t worth less than the value of the loans.

New ‘Celsius token’ may be used to repay creditors: Report

Months before FTX collapsed, crypto lender Celsius filed for bankruptcy after its degen crypto portfolio failed to survive the bear market. Billions in customer deposits now hang in the balance as the company looks for an optimal reorganization strategy. This week, it was reported that Celsius was considering issuing its own token to repay creditors. Of course, this means relaunching its platform. Apparently, Celsius wants to wrap this up in a new publicly-traded company that is “properly licensed.” I’m not sure Alex Mashinsky will ever succeed in crypto again, but here’s hoping Celsius creditors get something in return for trusting him in the first place.

BREAKING NEWS
– #CelsiusNetwork is looking at having a stratefied recovery smaller holders bellow 5k might get all assets to leave.
– Larger holders will get a debt token that seems to represent all the value, so you can sell if you dont believe in the company or recovery.

— CelsiusFactsNumbers (@CelsiusFacts) January 24, 2023

Injective launches $150M ecosystem fund to boost DeFi, Cosmos adoption

If you’re looking for a silver lining in crypto this week, take solace in the fact that companies are once again raising hundreds of millions in venture capital (VC). Chief among them is Injective, the layer-1 blockchain protocol built on Cosmos SDK. This week, Injective announced a $150 million ecosystem fund backed by Pantera Capital, Kraken Ventures, Jump Crypto, KuCoin Ventures, Delphi Labs and others. The fund will support developers building on the Cosmos network — specifically infrastructure solutions, trading platforms and proof-of-stake technology. Will crypto VC rebound strongly in 2023? Only time will tell.

Before you go: Why is crypto pumping?

Bitcoin’s price crawled back above $23,000 this week and appeared to have entered a higher range — raising cautious optimism that the bottom is in. But does anyone know why BTC and the broader crypto market are pumping? In this week’s Market Report, I sat down with fellow analysts Marcel Pechman and Joe Hall to discuss whether the current pump is sustainable. We also explored what could be in store for digital assets in the coming months. You can watch the full replay below:

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