FTX Loan Wiped Out $800M in BlockFi Executives’ Equity, Filings Reveal

A loan from FTX last year saw BlockFi executives’ equity holdings wiped out by a total $800 million – in exchange for which they granted themselves pay rises of as much as $500,000 each, filings show.

A statement of financial affairs for the crypto lender, filed Thursday, contains thousands of pages of transactions that took place in the run up to its collapse, with gross revenue of over $4 million for 2022 until its collapse on Nov. 28.

In the wake of the crypto winter last June, FTX offered BlockFi a $400 million loan. The bankruptcy of FTX on Nov. 11 sent a shockwave through the industry – and the filing details the impact of the June transaction on 13 of BlockFi’s top executives.

“The massive impact of the FTX transaction on management equity led BlockFi’s board of directors to, among other things, increase base salaries and make retention payments for those that remained in the interest of retaining business critical knowledge and capabilities,” said the filing, made by BlockFi lawyers to the New Jersey Bankruptcy Court.

(By Jack Schickler)

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