While BlockFi regularly touted a sophisticated risk management team, current and former employees indicate in interviews that risk professionals were dismissed by executives preoccupied with delivering growth to investors. As early as 2020, employees were discouraged from describing risks in written internal communications to avoid liability, a former employee states. 

BlockFi positioned itself as a bank-like institution that was a safe place for retail investors to store their funds and earn interest, but the company used retail deposits for questionable lending and unsustainable trading activities, says Ram Ahluwalia, CEO of digital asset investment advisor Lumida. “What they were really doing, these retail depositors, is they were financing a hedge fund,” says Ahluwalia, who worked in credit risk analysis and management before crypto.