AMIT CHEELA was the Chief Financial Officer of the now-bankrupt crypto lender BlockFi.
But what is the story behind the rise and fall of the man in charge of BlockFi’s finances?
Who is Amit Cheela?
Amit Cheela was born in the 1980s in the US. He graduated with a degree in economics from New York University in 2007 and a Master of Arts in Accounting from the University of Southern California, Marshall School of Business in 2009.
After completing his education he joined the accountancy firm PWC, working on their financial due diligence team from 2009 to 2011.
He then went on to join the hedge fund ESL Investments before becoming Officer of Finance and Operations at Coastal Investment Management.
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Cheela joined BlockFi in June 2018, less than a year after the company was first founded by Flori Marquez and Zac Prince.
One of the first employees at the company, and one of the most senior, the ex-City man came in as Chief Financial Officer.
He was in charge of overseeing BlockFi’s corporate finance, capital markets, treasury, strategic planning, and corporate development functions.
Cheela’s position meant he was particularly exposed when the firm entered financial difficulties.
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In February 2022, the firm was ordered to pay a record $100million fine by the US Securities and Exchange Commission.
The largest penalty ever handed out in a crypto enforcement action came after the regulator accused BlockFi of failing to register its lending product as a security, and misrepresenting the product’s risks.
The fine meant BlockFi struggled to stay afloat when the crypto market crashed due to the collapse of LUNA in May.
Then, on November 17, 2022, BlockFi filed for bankruptcy after becoming victim to the collapse of FTX just two weeks earlier.
The crypto lender was already in a precarious financial situation and had agreed a deal with Sam Bankman-Fried‘s exchange in July 2022, three months prior to its demise.
The deal would have seen FTX give BlockFi $400million in loans with the option for FTX to later buy the lender for about $240million.
While FTX never bought BlockFi before it went bust, the lender’s close links with the failed exchange were enough to cause a bank run that left it with no choice but to file for bankruptcy.
In January 2023 it emerged BlockFi had given the go-ahead for senior staff’s pay to be boosted last November after the digital asset lender filed for bankruptcy.
Cheela had $292,000 stored on BlockFi which was wiped out by the insolvency.
However, his pay was increased by as much as 50 per cent as part of a so-called ”retention program” in the immediate aftermath, helping to recoup his losses.
Bankruptcy documentation filed on January 12 said: “The massive impact of the FTX transaction on management equity led BlockFi’s board of directors to, among other things, increase base salaries and make retention payments for those that remained in the interest of retaining business critical knowledge and capabilities.”
