- They think the FTX excuses are attempts to justify themselves
- And remembered all the failures of the Top Managers
At yesterday’s court hearing, the Creditors Committee took another harsh swipe at BlockFi management. This can be read in the published minutes.
Creditors believe that BlockFi is shifting responsibility to FTX and Alameda to divert attention.
They say the real reason for the failures is the wrong decisions of the top management and participants in the restructuring.
The Committee of Creditors has its own arguments.. So, a few days after the collapse of FTX, when the crypto market was storming, BlockFi converted cryptocurrency into fiat at an unfavorable rate.
We are talking about assets worth about $ 240 million. The unprofitable exchange led to significant losses and potential tax hardship for customers.
BlockFi’s mistakes don’t end there. So, they managed to transfer the proceeds and an additional $10 million to SVB Bank, which soon went bankrupt.
Silicon Valley brand was not a strong depository institution, but somehow management did not consider such risks. Federal authorities later intervened and rescued all SVB depositors.
The committee also accuses BlockFi of unreasonable spending. For example, they bought $22 million in insurance for their directors and top executives.
BlockFi said yesterday that it will liquidate its cryptocurrency platform in the coming months.
This reduces the chances that the company will be able to find a buyer and save the business from bankruptcy.