Sep 14, 2026 · 46 min
BlockFi’s collapse reshapes Galaxy’s risk strategy
Zac Prince on BlockFi, Bitcoin, and GalaxyOne
Zac Prince connects BlockFi’s failure and regulatory battles to a more conservative model for integrated crypto and traditional finance.
- 1BlockFi lost most of its client assets after industry failures and exposure to falsified Alameda financial statements.
- 2Galaxy One combines banking, brokerage, crypto, yield, lending, and staking while emphasizing balance-sheet management over speculation.
- 3Prince argues that clearer regulation and permissioned AI tools could reshape how people manage personal finances.
Don't miss
Prince explains how BlockFi’s collapse and exposure to Alameda informed Galaxy’s stricter approach to asset custody, lending, and risk.
The brief
Zac Prince recounts how regulatory actions, client withdrawals after the Celsius and Voyager failures, and exposure to Alameda’s falsified statements pushed BlockFi from growth into collapse.
The central lesson is risk control: Prince contrasts BlockFi with Galaxy’s stated refusal to rehypothecate assets or lend crypto on its platform, while separating fraud from ordinary failure.
Galaxy One extends that philosophy into an integrated app combining checking, brokerage, crypto, cash yield, lending, and staking rather than treating digital assets as a standalone trade.
The conversation then widens to political backlash, long-term portfolio construction, advisory fees, and whether AI agents should eventually execute permissioned financial tasks.
The standout tension is whether a single financial interface can manage a person’s full balance sheet without reproducing the leverage and opacity that damaged crypto finance.
What was said on this episode
16 statements · 7 positive · 7 negative · 1 mixed · 1 neutral
2021 regulatory action halted BlockFi’s U.S. signups and imposed a $100 million penalty.
“the regulatory action in the summer of 2021, completely out of the blue, resulted in us having to turn off new signups from U.S. customers for a period of time and a larger than we could have ever anticipated financial penalty of $100 million.”
Listen at 2:23
BlockFi customers withdrew approximately 85% of platform assets.
“About 85% of our customer assets on the platform were withdrawn.”
Listen at 2:56
Crypto lending is difficult, possibly impossible, to scale.
“crypto lending is really hard to scale, maybe even impossible. to scale.”
Listen at 15:30
Bitcoin does not natively produce yield.
“Bitcoin doesn't produce a yield.”
Listen at 15:34
Scaling crypto lending tends to require taking greater risk.
“as you scale, you're kind of forced to go out on the risk spectrum a little bit.”
Listen at 15:39
Crypto cannot be eliminated because it is a new technology.
“You can't put something that's a new technology like this back into the box.”
Listen at 21:05
Some crypto-related firms failed without fraud, while FTX and Celsius committed fraud and failed.
“Silvergate, Silicon Valley Bank, BlockFi, some other companies who objectively never committed any type of fraud went down, while others who objectively did commit fraud, FTX, Celsius... went down.”
Listen at 21:51
Prince’s risk appetite decreased substantially after the crypto crisis.
“post-crypto war, personally, my risk appetite decreased tremendously.”
Listen at 25:12
Investors seeking crypto exposure should use a preferred ETF issuer through a brokerage account.
“Now I say to that person, buy whatever brand you have the best affinity to between BlackRock, Fidelity, Bitwise and, you know, a couple other ETF issuers and put it in your brokerage account.”
Listen at 26:20
Galaxy One’s platform development has been going well for over a year.
“applying those lessons into building the platform at Galaxy One is something I've been doing for a little over a year now, and it's going really well so far”
Listen at 27:25
Galaxy Premium Yield offers accredited investors 8% on cash.
“a product called Galaxy Premium Yield, which is like a private credit instrument where accredited investors can earn 8% on their cash.”
Listen at 27:48
Event-based trading platforms are unlikely to manage large shares of investors’ long-term capital.
“I don't think platforms like that are where investors are going to manage large percentages of their long-term capital, of their nest egg that they've built up for their family.”
Listen at 29:11
Galaxy One offers portfolio-backed borrowing below a 9% rate.
“you can now borrow against those assets as a single portfolio on Galaxy One at a rate below 9%.”
Listen at 35:14
Solana staking rewards are approximately 6%.
“I think it's ballpark 6%.”
Listen at 35:54
Galaxy One offers Solana staking with zero commissions through year-end.
“we're actually offering staking with zero commissions currently through the end of the year”
Listen at 36:15
Galaxy One may combine external-agent permissions with native AI functionality.
“we might ultimately end up with a mix of both.”
Listen at 43:58
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.