FTX, Alameda Settle Disputes with BlockFi for $874M

Crypto firms FTX and BlockFi have reached a significant settlement, potentially leading to BlockFi's full recovery. According to recent filings, FTX will pay BlockFi up to $874.5 million, resolving their disputes.

The agreement resolves BlockFi's nearly $1 billion claim against FTX.

The agreement, subject to approval by U.S. Bankruptcy Judge John Dorsey, marks a pivotal moment in the ongoing bankruptcy proceedings. It settles BlockFi's claims against FTX, amounting to nearly $1 billion. Additionally, FTX will waive millions in counterclaims against BlockFi.

BlockFi-FTX Agreement Details

Of the total sum, $185.2 million represents the value of BlockFi customer assets held on FTX.com. Another substantial portion, $689.3 million, relates to loans received by Alameda Research from BlockFi.

Proposed Settlement Agreement Terms for BlockFi Creditors

Under the proposed settlement, $250 million will be treated as a secured claim, prioritizing payment to BlockFi post-bankruptcy emergence for FTX. The remaining sum depends on FTX's ability to settle its obligations to its customers and creditors.

BlockFi Trustee Praises the Advantages of Early Mediation Resolution

The bankruptcy administrators of BlockFi view the settlement as highly favorable, achieved through early mediation. They highlight the cost-saving aspect of avoiding prolonged litigation with FTX.

BlockFi Seeks Claims Against FTX in Bankruptcy Proceedings

BlockFi filed for Chapter 11 bankruptcy protection in November 2022 following FTX's collapse earlier that month. Legal battles ensued in 2023, with BlockFi claiming over $1 billion owed by FTX.

BlockFi Faces Significant Debts to Creditors

Estimates suggest BlockFi owes substantial amounts to numerous creditors, totaling up to $10 billion. This includes significant debts to its largest creditors and other entities like Three Arrows Capital.

While BlockFi emerged from bankruptcy in 2023 and initiated a wallet for customer withdrawals, clarity remains regarding payouts to affected parties, including those with interest-bearing accounts.