The situation at BlockFi could be worse than it appears.

What Happened: Bankrupt crypto lender BlockFi mistakenly uploaded unredacted documents, revealing its $1.2 billion exposure to FTX and Alameda Research, according to a report from CNBC on Tuesday.

The unredacted financials reveal the firm had $415.9 million worth of assets tied to FTX and $831.3 million in loans to Alameda as of Jan. 14. These figures are significantly higher than the $355 million in assets on FTX and $671 million loan to Alameda that was previously reported by BlockFi’s legal counsel.

 A lawyer for BlockFi’s creditor committee told CNBC that the filing was uploaded in error and declined to comment further.

 BlockFi and FTX: BlockFi’s relationship with FTX began on a good note, with Sam Bankman-Fried providing the firm with much needed financial relief in its hour of need.

 In July, BlockFi CEO Zac Prince said FTX US would provide a $400 million credit facility to the firm and had also acquired the right to acquire BlockFi entirely for a variable price of $240 million.



After FTX’s collapse, BlockFi halted withdrawals citing a lack of clarity around FTX-related entities. Needless to say, users were less than empathetic towards the firm since it had spent the days prior assuring everyone that it was an independent entity from FTX and operations would in no way be affected by the exchange’s bankruptcy.

BlockFi filed for bankruptcy shortly after, citing liabilities between $1 billion and $10 billion. The firm was fighting with FTX’s liquidators over the rights to $525 million worth of Robinhood shares – until the U.S. authorities laid claim to them as of last week, arguing that they are part of Bankman-Fried’s property and not connected to FTX’s bankruptcy proceedings.

They Still Want to Pay Bonuses? The unredacted financials paint an even more concerning picture for BlockFi. In fact, the firm is looking to generate liquidity by selling $160 million worth of loans backed by around 68,000 Bitcoin mining rigs, as per a Bloomberg report on Monday.

Amid its ongoing crisis, the firm is seeking the court’s approval to pay its employees bonuses. A lawyer for the firm proposed a plan to award bonuses of 20-50% of the ir employee salaries for them to remain at the firm. 

BlockFi Chief People Officer Megan Crowell said it was necessary to retain key executives, who had received competitive offers from other companies, to prevent further strain on the bankrupt firm.

The move was criticized by several members of the crypto community, who took issue with BlockFi rewarding its own before it pays out creditors.  It also received pushback from BlockFi’s creditor committee, who stated earlier this month that every unnecessary dollar paid from these [Retention] Programs diminishes distributions to creditors.”