In a surprising twist in the ever-evolving landscape of the cryptocurrency world, Zac Prince, former CEO and co-founder of the now-defunct BlockFi Inc., has re-emerged as a notable figure in the digital asset industry. Prince is taking the helm of Galaxy Digital’s newly launched banking platform, Galaxy One. This development marks his return to a leadership role in crypto less than three years after BlockFi’s downfall, a collapse that was part of the broader implosion following the FTX exchange’s catastrophic failure.
A New Chapter Begins
Galaxy Digital, a prominent player in the crypto investment space led by former hedge fund manager Mike Novogratz, has brought Prince on board to spearhead Galaxy One. The platform, which officially launched today, aims to provide users a seamless experience in earning yield on cash deposits while trading both cryptocurrencies and traditional equities. This venture signifies Galaxy’s strategic move to integrate crypto services with mainstream financial offerings, albeit under a more cautious and stringent regulatory environment.
In an exclusive conversation with Bloomberg, Prince candidly reflected on his journey from BlockFi’s tumultuous end to his new responsibilities. “My personal risk appetite is more conservative,” he admitted, highlighting the lessons learned from his previous experiences. He emphasized that Galaxy’s operational structure and risk management are fundamentally different from BlockFi’s, describing the contrast as “night and day.”
Lessons from BlockFi’s Rise and Fall
BlockFi, once a symbol of the crypto lending boom, drew significant attention by offering high-yield interest accounts, with returns that tempted investors with rates as high as 9.5%. The company was bolstered by investments from notable firms like Peter Thiel’s Valar Ventures and Galaxy Digital itself, which led a substantial $52.5 million funding round in July 2018. However, the collapse of FTX in 2022 dealt a devastating blow, leaving BlockFi in a liquidity crisis it couldn’t overcome.
The aftermath was a chastening experience for the crypto sector. In addition to its financial woes, BlockFi faced legal battles with the U.S. Securities and Exchange Commission (SEC), which charged the company with failing to properly register its lending products and misleading clients about associated risks. The resolution came with a hefty $100 million settlement, a cautionary tale for others in the crypto lending space.
Galaxy One: A Balanced Approach
Galaxy One’s launch represents a calculated entry into consumer-focused financial services, reflecting the broader shift toward more regulated and sustainable business models in the crypto world. The platform’s dual offering of digital and traditional asset services aims to cater to a market that’s become more risk-averse following the excesses and ensuing corrections of the last crypto cycle.
Novogratz, known for his bullish stance on cryptocurrencies, appears committed to steering Galaxy Digital through the complexities of integrating digital assets with conventional finance. This initiative not only expands Galaxy’s portfolio but also addresses a growing demand for diversified financial products that can withstand regulatory scrutiny and market volatility.
The Road Ahead
Prince’s appointment and Galaxy One’s launch come at a time when the digital asset industry is grappling with the need for innovation balanced with accountability. As the sector matures, the focus is shifting from rapid growth to sustainable practices that can endure regulatory challenges and market shifts.
For Prince, this new chapter is both a personal and professional renaissance. He steps back into the limelight with a sharper focus on risk management and regulatory compliance, keenly aware of the pitfalls that previously befell him and the industry at large. His experience with BlockFi serves as both a cautionary tale and a reservoir of insights, which he now brings to Galaxy One.
Industry Reactions
The reaction from the crypto community has been mixed. Some industry veterans commend Prince’s return, viewing his experience as invaluable in navigating the complex regulatory landscape. Others remain skeptical, wary of past missteps and cautious about the ambitious promises of high yields that echo the pre-collapse crypto environment.
However, the broader sentiment is that of cautious optimism. There’s a recognition that the lessons from past failures, such as BlockFi’s, are integral to building a more resilient future for the crypto-financial ecosystem. Galaxy One’s approach of merging traditional finance with digital innovation, underpinned by robust regulatory frameworks, is seen as a step in the right direction.
Conclusion
As Zac Prince takes on his new role at Galaxy One, the crypto world watches closely, mindful of the sector’s past while hopeful for its future. The platform’s success or failure will likely serve as a barometer for the viability of integrating digital assets with traditional finance in a way that’s both innovative and responsible. For now, Prince’s return is a testament to the enduring allure of the crypto industry, one that continues to captivate and challenge its pioneers and newcomers alike.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
