- Former BlockFi CEO Zac Prince joins Galaxy Digital as managing director after brief real estate stint.
- Prince’s previous venture BlockFi faced SEC penalties of $100 million for misleading statements about asset safety.
- During his sabbatical, Prince worked as CEO of RE Cost Seg, focusing on real estate tax optimization.
- BlockFi’s collapse was closely tied to relationships with FTX and Alameda Research.
- This appointment represents another instance of crypto executives returning to the industry post-bankruptcy.
Galaxy Digital, the cryptocurrency investment firm led by Mike Novogratz, has appointed former BlockFi CEO Zac Prince as managing director, marking a significant return to the cryptocurrency sector for the executive whose previous venture ended in bankruptcy following the FTX collapse.
Prince’s appointment comes with considerable controversy, given his track record at BlockFi, a digital asset lending platform that maintained close ties with Sam Bankman-Fried’s crypto empire. The lending platform, which promised attractive interest rates to cryptocurrency depositors, ultimately failed after regulatory scrutiny revealed significant operational issues.
The Securities and Exchange Commission’s investigation found that BlockFi had misrepresented its collateral practices over a two-year period, resulting in a substantial $100 million penalty settlement. These violations occurred during Prince’s leadership between March 2019 and August 2021.
Following BlockFi’s downfall, Prince temporarily stepped away from the cryptocurrency industry, taking on the role of CEO at RE Cost Seg, a real estate technology firm. During this period, he expressed his need to distance himself from “the craziness and volatility of the industry.” He even rebranded his social media presence, switching from @BlockFiZac to @CostSegZac on X (formerly Twitter).
The appointment reflects a broader trend in the cryptocurrency industry where executives from failed ventures often find new opportunities within the sector. This pattern has raised questions about accountability and risk management practices in the digital asset space, particularly as the industry continues to mature and face increased regulatory scrutiny.
Historical precedent shows that the cryptocurrency sector has been relatively forgiving of past failures, with many executives receiving second chances despite leading companies that experienced significant losses or regulatory challenges. This approach contrasts sharply with traditional finance, where such failures typically result in longer-term career implications.
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