Ranking
Categories
Historical Snapshots
Token unlocks
Yield
Trending
Upcoming
Recently Added
Gainers & Losers
Most Visited
Community Sentiment
Chain Ranking
Market Overview
CoinMarketCap 100 Index
Fear and Greed Index
Altcoin Season Index
Bitcoin Dominance
Crypto ETFs
Overall NFT Stats
Upcoming Sales
New Pairs
Trending Pairs
Meme Explorer
Gainers & Losers
Community Votes
Top Traders
Spot
Derivatives
Spot
Derivatives
Feeds
Topics
Lives
Articles
Converter
Newsletter
CMC Labs
Telegram Bot
Advertise
Crypto API
Site Widgets
Airdrops
Diamond Rewards
Learn & Earn
ICO Calendar
Events Calendar
Academy
Research
Videos
Glossary
- BlockFi’s bankruptcy arose from risky lending and speculative investments.
- Entanglement with major funds worsened its financial state.
- CEO Zack Prince’s shift to real estate reflects uncertainty about BlockFi’s future.
Crypto Expert Louis recently revealed more insights regarding BlockFi’s bankruptcy saga. Established in 2017 by Zack Prince, the company embarked on a venture to lend out cryptocurrency. However, BlockFi’s fortune dipped, culminating in a bankruptcy filing in November 2022.
The flaw in BlockFi’s business model became apparent as it lent crypto for speculative purposes rather than productive economic activities. This risky approach was compounded by market dynamics, such as the “widow maker” trade, where investments in products like the Grayscale Bitcoin Trust turned sour, resulting in substantial losses for investors.
Moreover, BlockFi’s entanglement with major funds like Alameda Research and 3 Arrows Capital added to its woes. When these funds faced financial difficulties, FTX, led by Sam Bankman-Fried, offered a $400 million loan to rescue BlockFi.
Nonetheless, this intervention led to further complications. As such, it raised que…