Cryptocurrency lender BlockFi has had a very tumultuous 12 months. After getting caught up in the Terra fiasco, which resulted in one of the most prolific asset death spirals of all time, the company managed to avoid bankruptcy after receive a lifeline of USD 400 million in July 2022. The problem? His lender was FTX US, and we all know what happened next.
Although BlockFi has tried to separate itself from the Sam Bankman-Fried fraud following the collapse of FTX, its secretive finances tell a different story.
This week’s Crypto Biz delves into BlockFi’s raw financials, the likelihood of the “new Celsius token” ever seeing the light of day, and the latest high-profile funding deal in the blockchain space.
BlockFi’s Uncensored Financials Show $1.2B FTX Exposure
To what extent are they bad? blockfi finance? For starters, the bankrupt cryptocurrency lending company reportedly has $1.2 billion in assets invested in the failed businesses of Sam Bankman-Fried – FTX and Alameda Research, to be specific. According to CNBC, BlockFi made these details public by accident, adding insult to injury. However, the documents show that the company had $315.9 million in assets tied to FTX and $831.3 million in loans to Alameda as of January 14. Although BlockFi has tried to separate itself from the SBF companies, it looks like it will continue to hang around the same sinkhole as FTX and Alameda.
BlockFi to Sell $160 Million in Bitcoin Miner-Backed Loans
Apparently, BlockFi intends to sell USD 160 million in loans backed by 68,000 Bitcoin (BTC) miners as part of its bankruptcy proceedings. Sounds like a good strategy to raise liquid funds, right? Unfortunately, some of these loans have already defaulted and are likely under-secured. after Bitcoin’s year-long bear market. A legal expert interviewed by Cointelegraph warned that the loans are likely “no longer worth their paper value.” Let’s hope for BlockFi’s sake that the value of the mining equipment used in collateral is not worth less than the value of the loans.
The “new Celsius token” could be used to repay creditors
Months before FTX collapsed, crypto lender Celsius filed for bankruptcy after its degen crypto portfolio failed to survive the bear market. Billions in customer deposits now hang on the balance sheet as the company looks for an optimal reorganization strategy. This week, it was reported that Celsius was considering issuing its own token to repay creditors. Of course, this means relaunching its platform. Apparently, Celsius wants to wrap this up in a new publicly-traded company that is “properly licensed.” I’m not sure Alex Mashinsky will ever succeed in crypto again, but here’s hoping Celsius creditors get something in return for trusting him in the first place.
Months before FTX’s bankruptcy, the Cryptocurrency lender Celsius filed for bankruptcy after his degen cryptocurrency wallet failed to survive the bear market. Billions in customer deposits now hang in the balance as the company searches for an optimal reorganization strategy. This week, it was reported that Celsius was considering issue your own token to pay creditors. Of course, this means relaunching your platform. Apparently Celsius wants to wrap all this up in a new publicly traded company that is “duly licensed”. I’m not sure Alex Mashinsky will succeed in the crypto space again, but here’s hoping Celsius’s creditors get something back for trusting him in the first place.
BREAKING NEWS
– #CelsiusNetwork is looking at having a stratified recovery smaller holders bellow 5k might get all assets to leave.
– Larger holders will get a debt token that seems to represent all the value, so you can sell if you don’t believe in the company or recovery.— CelsiusFactsNumbers (@CelsiusFacts) January 24, 2023
Injective Launches $150M Fund to Drive DeFi and Cosmos Adoption
If you’re looking for a silver lining in crypto this week, take solace in the fact that companies are once again raising hundreds of millions in venture capital. Chief among these is Injective, the layer 1 blockchain protocol based on the Cosmos SDK. This week, Injective has announced the creation of a $150 million ecosystem fund backed by Pantera Capital, Kraken Ventures, Jump Crypto, KuCoin Ventures, Delphi Labs and others. The fund will support developers building on the Cosmos network – specifically infrastructure solutions, trading platforms and proof-of-stake technology. Will private equity in the crypto space rebound strongly in 2023? Time will tell.
Before you go: Why is the crypto market rising?
Bitcoin price has broken above $23,000 again this week and appears to have entered a higher range, prompting cautious optimism that a bottom has been reached. But does anyone know why BTC and the cryptocurrency market in general are going up? in the episode of The Market ReportEarlier this week, I sat down with fellow analysts Marcel Pechman and Joseph Hall to discuss whether the current rally is sustainable. We also take a look at what could be in store for digital assets in the coming months. You can watch the full recording below:
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