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The second week of Sam Bankman-Fried’s criminal trial for fraud concluded with witness testimony from Zac Prince, whose crypto lending firm BlockFi loaned $1.1 billion to Alameda before FTX’s collapse.
From Alameda’s bizarre $65 billion “credit line” on FTX customer crypto to <a href="https://crypto.news/sbf-trial-day-6-ftx-paid-100m-in-chinese-bribes-to-unfreeze-1b-of-investigated-funds/" rel="noopener noreferrer nofollow">$100 million Chinese bribes</a>, SBF gave the orders according to ex-staffers and members of Bankman-Fried’s inner circle.
SBF shared far-off hopes of starting a new company as Ellison admitted FTX and Alameda’s fraud to almost 30 team members, one of whom recorded the whole affair and would eventually submit the audio clip as evidence to federal prosecutors, per <a href="https://twitter.com/innercitypress/status/1712819998786244685" target="_blank" rel="noopener noreferrer nofollow">InnerCityPress</a>.
With at least two government witnesses to go by trial day eight, CEO of crypto lender BlockFi Zac Prince resumed his testimony. On day seven of proceedings, Prince said BlockFi loaned $800 million to Alameda and went bust when Bankman-Fried’s crypto empire tumbled.
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 CRYPTO CREEPS: In Bankman-Fried Trial "All Hands" Meeting Audio Has Caroline Ellison Laughing as Christian Drappi on the Stand <a href="https://twitter.com/hashtag/CryptoCreeps?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#CryptoCreeps</a> – Inner City Press tale: <a href="https://t.co/zBlgcJ7zaj" target="_blank" rel="noopener noreferrer nofollow">https://t.co/zBlgcJ7zaj</a> More on this, 2d man &amp; troll, on <a href="https://twitter.com/SubstackInc?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">@SubstackInc</a> here <a href="https://t.co/TjG7Y0KGkY" target="_blank" rel="noopener noreferrer nofollow">https://t.co/TjG7Y0KGkY</a> <a href="https://t.co/5pqIJkbUxO" target="_blank" rel="noopener noreferrer nofollow">pic.twitter.com/5pqIJkbUxO</a>— Inner City Press (@innercitypress) <a href="https://twitter.com/innercitypress/status/1712819998786244685?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">October 13, 2023</a>
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<h2 class="wp-block-heading" id="alameda-and-3ac-loans-crashed-blockfi-says-ceo-prince">Alameda and 3AC loans crashed BlockFi says CEO Prince</h2>
BlockFi opened lending to SBF’s trading firm in early 2021 according to Prince, and the lending house conducted due diligence with know-your-customer (KYC) checks. KYC applied to both retail and institutional clients, more for the latter Prince added.
Per Prince’s testimony, Alameda borrowed had initially borrowed $50 million from BlockFi by May 2021.&nbsp;
A year later, BlockFi had issued over $1 billion in open-term loans to SBF’s so-called hedge fund. It was around this period that Terra’s ecosystem collapsed prompting defaulted loans owed to Prince’s lender.
Three Arrows Capital (3AC) left BlockFi with heavy losses and the company recalled $650 million in loans disbursed to Alameda when FTT’s price dipped significantly. BlockFi also had $350 million stuck on FTX as the crypto exchange stopped withdrawals in November 2022.
Alameda provided shares in Robin Hood and Grayscale’s Bitcoin Trust (GBTC) as collateral to BlockFi, Prince told the court.
You might also like: <a href="https://crypto.news/ftx-founder-sam-bankman-frieds-trial-day-7-recap/" rel="noopener noreferrer nofollow"> FTX founder Sam Bankman-Fried’s trial day 7: Recap </a>
Caroline Ellison’s testimony <a href="http://SBF trial day 7: FTX lost $100m in Terra/UST crash" rel="noopener noreferrer nofollow">mentioned</a> hundreds of millions borrowed from other lenders like Celsius, Genesis, and Voyager. These loans were repaid using user assets deposited on FTX, per <a href="https://crypto.news/sbf-trial-day-4-witness-recounts-alamedas-65b-credit-line-and-alleged-unlimited-ftx-withdrawals/" rel="noopener noreferrer nofollow">multiple witness accounts</a>.
Regarding the failed FTX-BlockFi merger, the witness said terms included a future acquisition and an extended credit line.
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 We decided if we could bring additional capital in to help with consumer confidence, it would be good. FTX proposed a deal, that had two parts – a $400 million credit facility and for FTX to acquire BlockFi in July 2023. But it never happened. <cite>Zac Prince, BlockFi CEO</cite>
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In hindsight, BlockFi’s Prince opined that Alameda would never have received loans from lenders if FTT’s risk and treatment of FTX customer assets were disclosed to the public.&nbsp;
Week 2 of SBF’s trial closed by 12:30 p.m. New York time. Judge Lewis A. Kaplan adjourned proceedings until Oct. 16. Prosecutors have three more witnesses to call including FTX’s ex-director of engineering, Nishad Singh.
Read more: <a href="https://crypto.news/sbf-trial-day-7-ftx-lost-100m-in-terra-ust-crash/" rel="noopener noreferrer nofollow"> SBF trial day 7: FTX lost $100m in Terra/UST crash </a>

SBF trial day 8: BlockFi’s Zac Prince blames FTX and Alameda for lender’s downfall

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