BlockFi, a crypto-lender, recently revealed that its CEO, Zac Prince, withdrew close to $10 million from the platform last year to pay taxes.
The funds were made available thanks to a $400 million loan from FTX. In April of 2022, Prince withdrew $9.2 million from the BlockFi platform, followed by an additional $1.36 million in August.
This loan followed a period of sector-wide contagion that caused material withdrawals from platforms across the cryptocurrency industry.
In addition, FTX provided an additional $15 million to BlockFi insiders in June after a counterparty threatened litigation.
BlockFi has stated that the payments were routed through the executives and made to the counterparty as part of a confidential settlement.
It is worth noting that BlockFi’s management team has deployed their personal assets on the platform to trade, earn interest, and store different cryptocurrencies, thus transmitting to them client benefits from the FTX bailout.
Furthermore, Prince and other insiders have not made any withdrawals since October 14, 2022, and no withdrawals of [greater than] 0.2 BTC in value since August 17th.
Ultimately, BlockFi’s disclosure highlights the importance of having a reliable source of funds available to pay.