BlockFi News: The CEO of BlockFi Does not Want to be Compared to Voyager or Celsius

07/12/2022By: C, Fiona

Twitter user Zac Prince took to the site just a few days after BlockFi’s warrants were rated “worthless” to ask that his company not be compared to others.

One of Sam Bankman-firms Fried’s has loaned money to BlockFi, and Prince wants to make it clear that his company is not like Voyager Digital, which received a loan from one of Bankman-Fried’scompanies.

They sound like they’re in comparable predicaments, and that’s because they are. Prince, on the other hand, sees it differently. He asked journalists and market analysts to cease making comparisons between BlockFi and other cryptocurrency lenders in a brief thread he started on Twitter on Monday morning.

“Two months ago, we looked the same,” he wrote. “They’ve shut down, and their clients are going to lose money.”

He tweeted first, and Voyager responded an hour later with a new stream of commentary. However, the corporation has filed for bankruptcy and is currently restructuring its finances.

 

You can expect your money refunded after a reconciliation and fraud-prevention process, the business said. Customer cash is maintained in an account at Metropolitan Commercial Bank and is equal to the amount of cash in Voyager accounts.”

Difference Between BlockFi and its Competitors

It’s possible that not everyone is aware of the dramatic difference between BlockFi and its competitors.

According to a recent Bloomberg report, The Private Shares Fund has deemed the warrants issued by BlockFi to be worthless. For investors, warrants represent the right to own a stake in BlockFi.

A lot of Grayscale Bitcoin Trust (GBTC) is on the balance sheets of BlockFi, as well as Three Arrows Capital, according to Meltem Demirors, chief strategy officer at Coinshares.

In the last two weeks, it has traded for as much as 35% less than Bitcoin, so it’s not a terrific asset to have on hand right now. Three Arrows, which is also known as 3AC, has been ordered by a court to be liquidated, and GBTC’s share could suffer as a result of the sale of that portion.

“BlockFi directly holds zero GBTC,” Prince tweeted in response to Demirors, clarifying that she wasn’t looking at the most recent data.

“The idiocy and risk-taking conduct” of retail lenders like BlockFi, Voyager, and Celsius, Dan Held, the head of growth marketing at Kraken, wrote in a blog post earlier this month.

As a result, “I had hoped that they would have operated with the slightest tint of maturity with their loan book,” he wrote. As a society, we should strive for greater transparency, responsibility, and honesty.”

BlockFi disclosed the final terms of its arrangement with Bankman-cryptocurrency Fried’s exchange, FTX, last week, which was largely perceived as a rescue. FTX has an option to buy the company for up to $240 million, which is a far cry from the $3 billion it was valued at in March 2021, and a $400 million revolving credit line.

Voyager Digital, meanwhile, has a $500 million line of credit from Alameda Research, the billionaire’s trading firm. Alameda Research, the company’s second-largest borrower (behind Three Arrows Capital), owes the company $377 million, complicating the company’s financial situation.

Chapter 11 bankruptcy documents released on Wednesday revealed the terms of Alameda’s borrowing from Voyager.

The collapse of hedge fund Three Arrows Capital, the first of the major crypto lenders to impose a withdrawal freeze on June 12, was particularly painful for crypto lender Celsius. It is said that unnamed insiders told The Block that the corporation considered a transaction with FTX, but turned it down due of a “$2 billion hole in its balance sheet.” es