The Pomp Podcast: Zac Prince on BlockFi’s Collapse and GalaxyOne’s Risk Reset

**SPEAKER_1** (0:01)
When crypto boom turned to collapse, the details were brutal.
Anthony Pompliano's conversation with Zac Prince really pulls back the curtain on what happened at BlockFi and what he's building now with GalaxyOne. And Prince doesn't hold back about the fraud at the center of it all. He describes Slack messages where Caroline Ellison would say, "Here's the balance sheet I'm about to send to BlockFi," and Sam Bankman-Fried would literally push for the version with "the most significant lie."
That deception sits at the heart of everything. But it wasn't just FTX that brought BlockFi down, right? Prince points to three major blows: a surprise regulatory action in summer 2021, then bankruptcies at Celsius and Voyager in early 2022, and finally the FTX acquisition before FTX itself imploded. The numbers are staggering. BlockFi experienced a run with roughly 85 percent of customer assets withdrawn. Balances dropped from $14 billion to $2 billion.
And that 2021 regulatory enforcement was particularly harsh. New Jersey moved first, then eight states followed, calling interest-bearing accounts unregistered securities. That $100 million penalty wasn't minor either.
Prince says it weakened the firm at exactly the moment it needed capital most.
He actually calls the whole period a "crypto war," arguing the regulatory posture was intentionally harsh and that even solvent firms like Silvergate were forced out.
Which brings us to how this experience completely reshaped his approach to risk. At Galaxy, there's no rehypothecation and no crypto lending. Credit decisions are overseen by a board with finance professionals from major banks, and collateral standards are much tighter than BlockFi's were. Even his personal advice changed. Back in 2015, he told people with liquid assets and risk tolerance to get exposure to Bitcoin or Ethereum. Now? He says many people should simply buy crypto through firms like BlackRock, Fidelity, or Bitwise in a regular brokerage account. GalaxyOne really reflects that new philosophy. Prince describes it as a financial app combining checking, brokerage, crypto, and Galaxy Premium Yield, which offers 8 percent on cash for accredited investors. He's calling it a "one-stop app for all financial needs," with no gambling-style products and no focus on super-leverage. The platform also includes a crypto-backed line of credit, staking with zero commissions, and plans for more seamless banking and AI tools. For Prince, the mission is simpler now: build with transparency, manage risk well, and create something useful long after the hype fades. That's quite the pivot from where BlockFi ended up. after the hype fades. That's quite the pivot from where BlockFi ended up.