Zac Prince made his millions when he founded the now-bankrupt wealth management crypto firm BlockFi.
But what’s the story behind his fortune and what is his net worth now?
Who is Zac Prince?
Zac Prince graduated from Texas State University in 2008 with a BA in International Business and a minor in Spanish that he financed through online poker.
Upon finishing his degree, the young American joined advertising optimisation platform Admeld, where he led the sales team in revenue generation before the company’s acquisition by Google.
He then became director of sales for Berlin based technology company Sociomantic Labs, which sold to Tesco in 2014.
Prince also led a business development team at broker Orchard Platform.
READ MORE ON THE 24/7 PROJECT
After spending eight years working for other people, in 2016 he decided to go it alone and set up his own business. The budding entrepreneur founded Better Finance Guru.
The website aimed to provide information about the best financial technology products and investments for consumers.
However, his first venture lasted just over a year. In 2017 Prince took a role as SVP, business development and sales at financing firm Katapult.
It was just several months later that he decided to start his second business. Teaming up with investor Flori Marquez, Prince founded BlockFi in October 2017 with the ambition to provide credit services to the cryptocurrency market.
BlockFi allowed users to earn yield for cryptocurrency deposits and was once valued at $3 billion.
What happened to BlockFi?
BlockFi was based in Jersey City, New Jersey initially but went on to expand into New York, Singapore, Argentina and Poland.
In January 2018, BlockFi launched loans of US dollars backed by cryptocurrencies which meant clients could deposit Bitcoin (BTC) or Ethereum (ETH) and take out loans in fiat (dollars, euros and more) using the crypto as collateral.
In February 2018, BlockFi raised $1.55 million followed by $52.5 million in July 2018 and another $4 million at the end of 2018.
In March 2019, BlockFi launched a cryptocurrency deposit account that reinvested earnings from Bitcoin or Ethereum deposits and gave clients an opportunity to earn compound interest at a 6.2 per cent annual percentage yield (APY).
But by May 2019 the firm had almost halved the interest rate on ETH deposits but over $50 million had been deposited in its high interest accounts.
The risk of the high-interest account for clients was it didn’t come with the backing of the federal government like a savings account at a bank does.
In August 2019, BlockFi raised another $18.3 million and then in December 2019, started offering the option to trade cryptocurrency with no fees on purchases or sales.
Instead of charging trading fees, BlockFi made money by selling trading data to institutional cryptocurrency firms.
Zac Prince said at the time: “Market makers want the information about what trades are happening, and they get it by having relationships with as many venues as they can support to receive that order flow.”
Another $30 million was then raised in February 2020.
In March 2020, BlockFi joined forces with Silvergate Bank to allow clients to make cash deposits through wire transfers to buy Bitcoin.
Prince said he had been inundated by “requests every day from our existing clients, and also from folks who aren’t already cryptocurrency owners.”
At the time, BlockFi disclosed it had $650 million of assets on its platform.
Then in 2020, disaster struck as BlockFi was hacked. No funds were taken, but the attacker did manage to access confidential information about BlockFi’s customers.
In August 2020, BlockFi raised a further $50 million, and BlockFi held $1.5 billion in assets – making just under $10 million in revenue each month.
BlockFi then bought 5 per cent of Grayscale’s Bitcoin Trust which was valued at $4.8 billion in October 2020.
The firm then went on to purchase more of Grayscale’s Bitcoin Trust to a value of $1.7 billion by February 2021.
At the start of 2021, BlockFi created its own Bitcoin Trust with the US Securities and Exchange Commission, making it a direct competitor to Grayscale’s product.
The fund offered a smaller management fee and by November of that year, it filed for approval for a spot Bitcoin exchange-traded fund.
BlockFi was flying and raised a further $350 million, giving the company a valuation of $3 billion.
It held $15 billion in assets, had 225,000 users and ambitions to have 500 staff by the end of the year.
Then hard times struck again with New Jersey’s Bureau of Securities claiming BlockFi’s interest accounts were an “unregistered security” and put in place a ban on creating new big-interest accounts.
Alabama then followed New Jersey along with Texas, Vermont and Kentucky.
In February, BlockFi had to pay the US Securities and Exchange Commission $100 million because of its high-yield lending product.
Despite registering with the SEC, by mid-February the firm had stopped offering the interest account to new clients in the US.
SEC Chair Gary Gensler said: “The settlement makes clear that crypto markets must comply with time-tested securities laws.”
By the summer of 2022, BlockFi’s valuation had sunk and news emerged of huge loans the company had made to crypto hedge fund Three Arrows Capital, which filed for bankruptcy protection on July 1, 2022.
Then late on November 10, BlockFi paused customer withdrawals amid “the lack of clarity” about FTX.
By November 11, California’s financial regulator revoked BlockFi’s lending license and on November 28, the firm officially filed for bankruptcy, leaving over 100,000 creditors in the lurch.
BlockFi said the bankruptcy filing would allow the company to develop a “reorganisation plan that maximises value for all stakeholders, including our valued clients” and claimed to have almost $257 million in fiat on hand.
What is Zac Prince’s net worth?
Zac Prince is thought to be worth approximately $100 million.
While a significant sum, it is far smaller figure than Prince’s worth at the start of 2022.
Back then the crypto entrepreneur was believed to have a net worth of around $500 million.
However, the collapse of BlockFi in November 2022 caused his net worth to plummet.
Prince cashed out close to $10 million from the platform to pay taxes in 2022.
BlockFi said: “Like many BlockFi clients, Zac deployed his own personal assets on BlockFi’s platform.
“Zac kept a substantial portion of his assets on the platform, and the withdrawal he made in April 2022 was to pay US federal and state taxes.”