BlockFi CEO points finger at Alameda, FTX for collapse of crypto lender during testimony at SBF trial

Quick Take

  • BlockFi CEO Zac Prince testified on Friday as Sam Bankman-Fried’s trial hurdles toward the end of its second week.

BlockFi CEO Zac Prince blamed the collapsed FTX crypto exchange and its sister trading firm Alameda Research for his own firm's bankruptcy while testifying in court at Sam Bankman-Fried's criminal trial, stating he would have never have dolled out funds had he known false balance sheets were being used.

Prince told prosecutors that BlockFi had a total of $1.1 billion on the exchange. When prosecutors then asked Prince why BlockFi declared bankruptcy, he attributed it to Alameda and FTX, according to Inner City Press

When asked if BlockFi would have lent funds to Alameda had it known it was using FTX customer funds, Prince responded by saying, "No. That is not appropriate," Inner City Press said. Prince said that BlockFi called some of the loans, but that there had been $650 million still outstanding.

"They posted as collateral Grayscale Trust and Robinhood," Prince added. 

Prince testified on Friday as Bankman-Fried's trial hurdles toward the end of its second week. The case is expected to last about six weeks, and the former FTX CEO faces decades in prison if he is convicted on a slew of charges, including fraud, over allegations that he and other FTX executives used billions of customer assets to make their own failed investments. FTX filed for bankruptcy protection late last year. 


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BlockFi’s fall

The crypto lender filed for bankruptcy protection in Nov. 2022, shortly after the collapse of FTX. Some of its biggest creditors included FTX.US and the Securities and Exchange Commission. 

BlockFi is currently working through its bankruptcy process. The firm issued a statement last month urging eligible parties to vote to accept the bankruptcy plan by a Sept. 11 voting deadline. According to BlockFi, the successful approval of the plan will "bring these chapter 11 cases to a fair and value‑maximizing conclusion that will return client funds as quickly as possible."

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Authors

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.
Zack Abrams is a writer and editor based in Brooklyn, New York. Before coming to The Block, he was the Head Writer at Coinage, a Web3 media outlet covering the biggest stories in Web3. The story he co-reported on Do Kwon won a 2022 Best in Business Journalism award from SABEW. Other projects included a deep dive into SBF's defense based on exclusive documents and unveiling the identity of the hacker behind one of 2023's biggest crypto hacks — so far. He can be reached via X @zackdabrams or email, [email protected].


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