The creditors of the crypto-currency lender, BlockFi, are asking the court to put the bankrupt firm’s assets into new management’s hands. According to an official statement from the Unsecured Creditors’ Committee, they expressed a lack of confidence towards the leadership team of BlockFi. The creditors further alleged that the firm’s executives, particularly their CEO, Zach Prince, had mismanaged customers’ funds. One of the accusations was that Prince had cashed out $10 million in the preference period prior to bankruptcy filing.

The executives had also received $10 million as a bonus from the court after BlockFi’s declaration of bankruptcy. On top of this, creditors accused BlockFi of buying a $30 million D&O insurance policy, which is used to protect the directors and officers in the event they’re faced with legal challenges in the future.

When the company declared bankruptcy, it had a total of $256.9 million in liquid funds. Yet, the creditors suspect that BlockFi had sold $240 million of crypto-currency and converted it back to fiat prior to the bankruptcy filing. This sales amount has led to the creditors believing that BlockFi had lost more than $100 million in the crypto-currency’s price upswing following bankruptcy.

In a recent tweet storm, BlockFi told individuals in the crypto-currency sector that recovering funds from FTX and Alameda research would be the best way to recover their money. This remark was met with a rebuttal from creditors, stating that the executive team had shown no signs of proper leadership. Creditors concluded that, in order for BlockFi to move forward, the court needs to put BlockFi's assets into new management’s hands.



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