BlockFi Insiders Did Not Withdraw Any Crypto After October: Report

BlockFi Insiders Did Not Withdraw Any Crypto After October: Report

Time Stamp: January 10, 2023 7:36 AM
Source Node: 1891310

Bankrupt crypto lender BlockFi’s executives have not withdrawn any of their own crypto held on the platform, lawyers told a bankruptcy court on Monday.

In the second hearing of BlockFi’s Chapter 11 bankruptcy proceedings reported by CoinDesk, the firm’s lawyers told the court that an “important takeaway” from the situation was that insiders did not pull money off the platform on the eve of its bankruptcy filing.

“So this is not the Celsius case where management extracted value on the eve of the file,” said Joshua Sussberg, a partner at Kirkland & Ellis, the law firm representing BlockFi. Interestingly, Kirkland & Ellis also represents Celsius in its own bankruptcy lawsuit.

Sussberg referenced $15 million worth of withdrawals made in August by five senior executives at BlockFi, of which $6 million was withdrawn by CEO Zac Prince, saying that this amount was used to settle litigation. Reuters reported that the settlement was related to a lawsuit over the company’s equity value in the summer of 2022.

Sussberg told the court that no member of BlockFi’s management team withdrew any crypto after Oct. 14, which was well over a month before the firm filed for bankruptcy. He also stated that the executives had not withdrawn an amount greater than 0.2 BTC after Aug. 17.

BlockFi plans to file its schedule of assets and liabilities and a statement of financial affairs on Jan. 11, the company said in a Twitter update.

“The filings contain information on BlockFi’s assets and liabilities, and disclose certain payments made by BlockFi to insiders and other parties prior to the bankruptcy filing,” said BlockFi.

In a preview of its assets and liabilities statement shared with investors in a presentation on Monday, BlockFi said its management teams withdrawals accounted for 0.15% of the $7.7 billion worth of retail withdrawals processed in 2022.

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