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BlockFi’s CEO cashed out $9 million from the crypto platform just after FTX gave it a multimilllion-dollar support loan

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In this photo illustration, the cryptocurrency exchange trading platform Blockfi logo is seen on an Android mobile device screen with the currency of the United States dollar icon.BlockFi signed a deal with FTX last year that granted it a $400 million revolving credit line.

Chukrut Budrul/ SOPA Images/ LightRocket/ Getty Images

  • BlockFi CEO Zac Prince withdrew over $9 million from the company thanks to an FTX support loan, the Block reported.
  • He cashed out the millions in order to pay US federal and state taxes, according to a company presentation.
  • Collapsed exchange FTX loaned BlockFi $400 million last year in an effort to save the struggling firm. 

Bankrupt crypto lender BlockFi’s CEO made withdrawals worth many millions of dollars from his own account with the company last year after it got a hefty loan from FTX.

Zac Prince pulled as much as $9.2 million in April 2022 and another $1.36 million in August, the Block reported. The BlockFi chief used the first withdrawal to pay US federal and state taxes, according to a BlockFi presentation dated January 9.

Prince’s transactions are reflected in data given in the presentation, which provides stakeholders historical background on the company amid its Chapter 11 proceedings. His assets with the company fell to $3.04 million in April 2022 from $13.15 million the previous month, the figures show.

The holdings dropped further to $1.37 million in August from $2.42 million in July. The declines would have been partly due to a drop in the market value of cryptocurrencies.

BlockFi did not immediately respond to Insider’s request for comment. 

FTX threw a lifeline to BlockFi last year, granting the company a $400 million credit line. The loan was meant to help ease BlockFi’s financial hardships amid a crypto market crash fueled by the Federal Reserve’s fastest interest-rate increases since the early 1980s. 

The company ultimately filed for bankruptcy in December following the collapse of FTX, citing exposure to the disgraced crypto exchange. 

In its presentation, BlockFi said its management team “deployed their personal assets on the platform, to trade, earn interest, and store different cryptocurrencies under the same terms of service as clients.” 

The firm told The Block: “Like many BlockFi clients, Zac deployed his own personal assets on BlockFi’s platform. Zac kept a substantial portion of his assets on the platform, and the withdrawal he made in April 2022 was to pay U.S. federal and state taxes. Zac and other insiders did not make any withdrawals since October 14, 2022, and no withdrawals of [greater than] 0.2 BTC in value since August 17th.”

Read the original article on Business Insider

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