BlockFi is accused of attempting to convert $239 million of customer crypto into fiat to avoid liability after FTX filed for bankruptcy in 2022, according to a report by BlockFi's committee of unsecured creditors.

The report also revealed questionable business practices by the company, including failing to properly vet its counterparties and having a heavily undercollateralized and risky loan portfolio.

BlockFi allegedly did not diversify its loan portfolio and relied heavily on crypto-centric firms. The company also purchased a $30 million Directors and Officers insurance policy shortly before filing for bankruptcy.