The courtroom drama unfolds as Zac Prince, the founder of BlockFi, delivered a startling revelation to the jury in the ongoing Sam Bankman-Fried trial update. Prince disclosed that when FTX declared bankruptcy in November 2022, BlockFi had a staggering $1 billion invested in both FTX and the defendant’s Alameda Research hedge fund.
Of this colossal sum, a significant $350 million in customer assets were locked within FTX’s exchange, while an astonishing $650 million remained tied up in loans provided to Alameda. The financial empire built by the defendant had crumbled, forcing Prince to make the dire decision to declare bankruptcy.
Shattered Alliances and Deceptive Practices
Prince, under oath, detailed the evolution of his relationship with Sam Bankman-Fried and Caroline Ellison, Bankman-Fried’s former right-hand at Alameda. The shockwaves reverberate as Ellison has already admitted to siphoning FTX customer funds to support Alameda and manipulating Alameda’s financial statements.
Prince made it clear that if he had been privy to Alameda’s heavy borrowing from FTX, the massive internal loans taken by FTX insiders, or the diversion of FTX customer funds towards Alameda, it would have altered the course of BlockFi’s involvement. “It could have made us potentially unwilling to lend to Alameda,” Prince asserted.
Sam Bankman-Fried Trial update : The Regulator’s Lens
Prince emphasized that BlockFi operated under constant scrutiny by U.S. regulators, with over 100 skilled employees scrutinizing Alameda’s financials. However, what they were unaware of was the intricate web of deception weaving its way from the Bahamas. The financial numbers emerging from Alameda, Prince described, were nothing more than smoke and mirrors.
