BlockFi initially settles with FTX and Alameda! Expected to recover nearly $900 million

In November 2022, the US crypto lending institution BlockFi failed to receive the originally promised US$400 million in credit support due to the collapse of FTX. In the end, they had to apply for Chapter 11 bankruptcy protection in court and announced the suspension of customer withdrawal services.

On October 25, 2023, BlockFi announced that its bankruptcy plan has officially taken effect, terminating its business and initiating asset liquidation to repay the debts of customers and other creditors. The company also pledged to continue working to recover monies owed to the platform from FTX, Three Arrows Capital and other companies.

Just today (7th), BlockFi’s recovery lawsuit against FTX has made significant progress. According to Coindesk and Cointelegraph reports, a court document shows that BlockFi and FTX have reached an “in principle” settlement agreement. to resolve all litigation and disputes. FTX agreed to pay BlockFi up to $874.5 million and drop its claims against BlockFi.

FTX agrees to pay $874.5 million to BlockFi

The settlement agreement needs to be approved by a bankruptcy judge. This may resolve BlockFi’s claims against FTX, which include approximately $355 million in cryptocurrency frozen on the FTX platform and a $671 million loan provided by FTX sister company Alameda Research. This will bring BlockFi customers closer to the possibility of full compensation.

Under the settlement agreement, BlockFi will receive a total of $874.5 million in damages, including claims against FTX.com for $185.2 million and claims for a $689.3 million loan provided by Alameda Research.

In the bankruptcy plan submitted by FTX, US$250 million will be paid first to BlockFi as a "secured" claim. The remaining claims will be distributed and paid subsequently according to the arrangements of the bankruptcy plan, in the same way as other similar claims. The plan has been approved by creditors.

As part of the agreement, FTX will give up its $275 million claim against BlockFi. In turn, BlockFi will support the FTX bankruptcy plan and vote in favor.

BlockFi's bankruptcy administrator said, "This negotiated agreement is an excellent outcome for BlockFi and its customers."

""BlockFi secures bankruptcy in FTX The $250 million will be received shortly after the plan is confirmed and effective, potentially allowing for a second interim distribution in the short term before distribution of general FTX unsecured claims begins."

BlockFi emerged from bankruptcy last October , wallet withdrawals have been opened

BlockFi, which emerged from bankruptcy in late October last year, has given priority to repaying some creditors last year and has opened withdrawals from almost all wallets, including international users.

However, customers with interest accounts Block FiInterest Accounts (BIA) and loans are not expected to be able to withdraw part of their assets until the beginning of this year, and further allocations will be made later, but the amount of funds allocated will mainly depend on BlockFi’s decision in the FTX lawsuit. results and the status of fund recovery. The company previously estimated that customers with BIA accounts are expected to recover 39.4% to 100% of their account value in crypto assets.

According to BlockFi’s bankruptcy documents, its bankruptcy affected more than 100,000 Creditors have liabilities ranging from US$1 billion to US$10 billion, of which nearly US$1 billion is owed to the three major creditors, including FTX’s US$275 million unsecured claim.

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