BlockFi CEO’s Key Testimony: Insights Into Alameda’s Financial Stability In FTX Trial
13 Outubro 2023 - 11:00PM
NEWSBTC
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. Related Reading:
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June 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. Related Reading: Man Makes A Fortune With $22 In
Bitcoin: 3 Altcoins For October 2023 That Can Do This 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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