The BlockFi business model involved lending out customer deposits to generate a return that was passed back to customers.These loans were high risk and as the market turned counterparty risk left BlockFi insolvent.After the collapse of Three Arrows Capital earlier this year, FTX extended a $250 million credit facility to BlockFi, which later morphed into a $400 million credit facility which also gave FTX US the ability to acquire the lender.FTX declared bankruptcy earlier this month.
