Bankrupt cryptocurrency lender BlockFi had over $1.2 billion in assets tied to Sam Bankman-Fried’s FTX and Alameda Research, according to financials that were recently uploaded without the redactions.

Crypto infrastructure company Blockstream has raised $125 million in convertible notes and secured loan financing to further its bitcoin mining hosting services. The company said it will use the funds to expand its mining facilities to meet the strong demand for large-scale hosting services.

Leading cryptocurrency exchange Binance has acknowledged that it mistakenly kept the collateral for some of its B-Tokens, which represent tokenized versions of various cryptocurrencies on the BNB Chain, in the same wallet as the exchange users’ funds.

 Top stories in the Crypto Roundup today:

• BlockFi Financials Reveal $1.2 Billion FTX Exposure
• Crypto Infrastructure Firm Blockstream Secures $125M in Funding for Bitcoin Mining
• Binance Acknowledges Error in Mixing B-Tokens’ Collateral and Customer Funds
• Chart of the Week: Assets Open Interest in 2023

BlockFi Financials Reveal $1.2 Billion FTX Exposure

Bankrupt cryptocurrency lender BlockFi had over $1.2 billion in assets tied to Sam Bankman-Fried’s FTX and Alameda Research, according to financials that were recently uploaded without the redactions.

BlockFi’s exposure to the collapsed cryptocurrency exchange is greater than prior disclosures suggested. The balance shown in the filing includes $415.9 million worth of assets linked to FTX and $831.3 million in loans to Alameda as of January 14.

The cryptocurrency lender filed for Chapter 11 bankruptcy in November, after the failure of FTX, which had planned to save the struggling company before its own collapse.

BlockFi’s lawyers had said earlier that the loan to Alameda was valued at $671 million, while there were an additional $355 million in digital assets frozen on FTX. The value of these holdings has grown after the prices of BTC, ETH and other cryptos rallied.

The crypto lender had 662,427 users, of which around 73% had under $1,000 in their accounts. The company had $302.1 million in cash, alongside wallet assets valued at $366.7 million. The lender has almost $2.7 million in unadjusted assets, with close to half tied to FTX and Alameda.

The latest financial statement from BlockFi shows that the value of the Alameda loan receivable and assets linked to FTX have been set to $0. Following these adjustments, BlockFi has a total of nearly $1.3 billion in assets, with only $668.8 million categorized as "Liquid/To Be Distributed."

Crypto Infrastructure Firm Blockstream Secures $125M in Funding for Bitcoin Mining

Crypto infrastructure company Blockstream has raised $125 million in convertible notes and secured loan financing to further its bitcoin mining hosting services. The company said it will use the funds to expand its mining facilities to meet the strong demand for large-scale hosting services.

In a statement, Blockstream wrote:

“Hosting has remained a resilient market segment as compared with 'prop' miners (and their lenders) who have been more directly exposed to bitcoin price volatility and compressed margins.”

Hosting is a service that data centers provide to cryptocurrency miners, so customers can store their mining rigs and mine digital assets for a fee. The service helps miners operate without large investments in building out infrastructure.

Binance Acknowledges Error in Mixing B-Tokens’ Collateral and Customer Funds

Leading cryptocurrency exchange Binance has acknowledged that it mistakenly kept the collateral for some of its B-Tokens, which represent tokenized versions of various cryptocurrencies on the BNB Chain, in the same wallet as the exchange users’ funds.

According to a Bloomberg report, the reserves for nearly half of the 94 Binance-peg tokens that the exchange issues are currently stored in a single wallet tagged as “Binance 8.” That wallet contains more tokens than would be necessary for the reserve of the issue B-tokens, indicating that collateral for these BNB chain tokens is being kept alongside users’ funds, instead of being stored separately.

A Binance spokesperson was quoted saying:

“‘Binance 8’ is an exchange cold wallet. Collateral assets have previously been moved into this wallet in error and referenced accordingly on the B-Token Proof of Collateral page. Binance is aware of this mistake and is in the process of transferring these assets to dedicated collateral wallets.”

The spokesperson reaffirmed that all customer assets on Binance “have been and continue to be backed 1:1.” The B-tokens, it’s worth noting, are tokenized versions of cryptocurrencies issued on other chains, such as Bitcoin (BTC), Ethereum (ETH), USDC, USDT, and more, on the $BNB Chain.

The Binance 8 wallet has reserves for more than 40 B-tokens. The wallet holds more than $1.8 billion in assets related to B-tokens, but its blockchain value is more than $16.5 billion, showing that there’s far more collateral than needed.

Chart of the Week: Assets Open Interest in 2023

Using our enhanced derivatives data, we analyzed the crypto futures market from January 1st to January 18th. During this period, the open interest for BTC increased by 5.09%.

Additionally, the open interest for ETH, XRP, and ADA increased by 14.29%, 51.6%, and 59.4%, respectively.

State of the Crypto by Top Tier Exchange Volume

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