BlockFi founder Zac Prince has announced a new crypto loan program to attract more assets with promises of interest-only loans, waived origination fees, and other promotional offers.
Meanwhile, members of a BlockFi class action who secured a court-ordered payout in their lawsuit against Prince, still haven’t actually received any money from that $13.25 million settlement.
Prince was a defendant in this litigation, settling allegations that he violated US securities laws by selling BlockFi Interest Accounts without adequate disclosures.
A judge has ordered that insurance companies backing him and his executive team at BlockFi must pay $13.25 million for this class of BlockFi customers.
Today, anyone who decides to trust Prince’s new product, a so-called “crypto portfolio line of credit” by GalaxyOne, are able to entrust as many digital assets with Prince’s new employer as they desire.
Eager to amass as much capital as possible, Galaxy is extending customers fee waivers and interest-only payment options to make sure depositors can maximize their financial leverage.
From 2018-2022, BlockFi amassed digital assets in its own way, paying up to 9.5% APY to incentivize inbound deposits. These APYs were obviously unsustainable, and the company went bankrupt in November 2022.
Prince, now a managing director of GalaxyOne, described his company’s newest crypto promo, saying, “We’re excited to bring a competitive crypto-backed borrowing product to market.”
He emphasized its “competitive” fees.
Zac Prince blew up BlockFi, now wants your deposits at Galaxy One
Zac Prince is back with another asset lending promo
GalaxyOne’s new product lets clients borrow against BTC, ETH, and SOL. Despite Galaxy claiming there’s no origination fee or rehypothecation, borrowers always risk liquidation of their collateral if prices fall.
Galaxy presents those guardrails as its differentiators. Sure, but they don’t make Prince’s encore performance any less awkward.
In addition to BlockFi’s high APY interest accounts, Prince also ran ran BlockFi’s crypto-backed loan programs. Both terminated four years ago.
According to the still-in-progress BlockFi, Inc. Securities Litigation, the $13.25 million payout is still pending a claims administrator who’s “moving forward the next steps in preparation for distribution.”
BlockFi’s insurers fund the $13.25 million pool, with Prince and the other defendants legally waiving any admission of wrongdoing.
A court approved that deal in December 2025.
Prince, meanwhile, is still making personal income from launching variants of crypto loan products.
Galaxy’s 2026 proxy filing doesn’t disclose Prince’s compensation, yet he’s apparently returned to profit from crypto lending before this class of BlockFi victims received their distributions.
Galaxy has history with BlockFi and Terra $LUNA
Unfortunately, Galaxy also has a history with another collapsed crypto project, Terra $LUNA, adding to its embarassing history with BlockFi.
With regard to Do Kwon’s collapsed high-yield scheme Terra $LUNA, New York’s attorney general secured an agreement requiring $200 million in disgorgement after finding that Galaxy promoted Kwon’s $LUNA while selling the now-worthless token.
Galaxy neither admitted nor denied the findings in that settlement.
The attorney general wrote, “Galaxy helped a little-known token increase its market price from $0.31 in October 2020 to $119.18 in April 2022, while profiting in the hundreds of millions of dollars.”
$LUNA is currently trading below $0.00005.
Galaxy must pay New York that disgorgement amount in four installments through 2028.
Leave a Reply
You must be logged in to post a comment.