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BlockFi, a crypto asset (virtual currency) lending service company that filed for bankruptcy, released presentation materials on the 9th for interested parties, explaining future procedures and the current situation.
BlockFi filed for bankruptcy by Chapter Eleven in the US last November. Since the same month, it has been in contact with 106 candidates interested in acquiring BlockFi, and plans to seek court approval on the bidding process on January 30.
Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)
A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.
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Withdrawals by insiders and their background
It also expects to file both a statement of assets and liabilities and a statement of financial position with the court on January 11. The document also discloses withdrawals made by BlockFi insiders and other parties.
BlockFi also explained insider trading in its presentation materials.
The company’s CEO, Zac Prince, withdrew about 1.2 billion yen (about $9.2 million) from BlockFi’s platform in April 2022. Also in August, he withdrew an additional ¥180 million (about $1.36 million). The company said Prince used the money to pay taxes.
However, BlockFi insists that the money is Prince’s personal property, telling cryptocurrency media The Block:
Like BlockFi users, Prince CEO had his personal assets deposited on BlockFi’s platform. He kept a significant portion of his assets on the platform.
The withdrawal I made in April 2022 was to pay US federal and state taxes. The CEO and other insiders have not withdrawn any funds since October 14, 2022. Furthermore, since August 17th, no withdrawals of more than 0.2 BTC have been made.
Financing from FTX
BlockFi attributed the withdrawal of funds to a loan it received from FTX.
Last June, when BlockFi was nearly sued by a client, FTX reportedly offered BlockFi insiders about ¥2 billion ($15 million) to use as a settlement. Due to the structure of the settlement, payments from BlockFi were routed through company executives and ultimately to the merchants.
The settlement money simply passed through the hands of the company’s executives, who did not retain the funds, but made them obliged to pay taxes. It is believed that the funds for this purpose were withdrawn from the platform.
In addition, FTX and BlockFi will invest approximately 52.7 billion yen (US$52.7 billion) for FTX to enable BlockFi to process billion-dollar withdrawals and other transactions requested by users between June and November 2022. ($400 million) worth of virtual currency financing.
As a result, although BlockFi’s liquidity was secured, the deal with FTX lowered the value of the company’s stock.
As an overview, BlockFi processed a total of about ¥100 billion ($7.7 billion) in withdrawals in 2022, with management accounting for 0.15% of that total.
BlockFi is committed to “maximizing the value of all users and stakeholders”, and on December 19, will allow customers using the “BlockFi Wallet Account” to withdraw. I just filed in bankruptcy court. The account was non-interest bearing and was used to hold and buy and sell cryptocurrencies.
Relation: Cryptocurrency lending company BlockFi applies to bankruptcy court for permission to withdraw some customers
The post BlockFi Discloses About Insider Withdrawals appeared first on Our Bitcoin News.
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