After three days of riveting testimony in the case against FTX co-founder Sam Bankman-Fried, a Manhattan federal courtroom got pulled into the inner workings of the business that drives the market at the heart of the trial — crypto.
Zac Prince, chief executive of defunct crypto lender BlockFi, took the stand Friday to discuss his firm’s business relationship with the digital-asset exchange and its sister trading fund, Alameda Research. BlockFi, which was a lender to Alameda and client of FTX, had some $1 billion in total exposure to the two companies at the point of its own failure in November 2022, Prince estimated.
Defense lawyers, however, sought to demonstrate that BlockFi provided the loans to Alameda willingly, with knowledge of the risks, and it’s industry norm for borrowers to provide “unaudited balance sheets” to lenders. BlockFi was among several companies that struggled under a rush of withdrawal requests and soured asset prices last summer, a situation that also affected Alameda. In May 2022, BlockFi had $1.1 billion in loans outstanding to Alameda, Prince said, which it repaid in full.
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