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Bankrupt cryptocurrency firms BlockFi and FTX have reportedly reached an “in principle” agreement to settle their disputes, as per a March 6 court filing. Under the terms of the settlement, FTX is set to pay up to $874.5 million to BlockFi, marking a significant development in the ongoing legal battle. 
The proposed <a href="https://storage.courtlistener.com/recap/gov.uscourts.njb.1094078/gov.uscourts.njb.1094078.2172.0.pdf">settlement</a> is contingent upon approval by the United States Bankruptcy Judge John Dorsey in Wilmington, Delaware. If approved, it would resolve BlockFi’s claims against FTX, totaling approximately a billion dollars. Additionally, the exchange will waive “millions of dollars of avoidance claims and other counterclaims” against BlockFi. 
As reported earlier, a <a href="https://thecoinrise.com/us-court-sanctions-blockfi-and-three-arrows-capital-settlement-deal/">US Bankruptcy Court has sanctioned a settlement</a> between BlockFi, a cryptocurrency lending firm, and the defunct crypto hedge fund Three Arrows Capital (3AC). 
<h2 id="span-style-font-weight-400-ftx-settles-with-3ac-span">FTX Settles with 3AC</h2> 
The $874.5 million settlement includes a $185.2 million claim against FTX.com, representing the value of BlockFi customer assets held on the exchange. Furthermore, there is a $689.3 million claim against Alameda Research for the loans it received from BlockFi. 
Of the total sum, $250 million is designated as a “secured claim,” prioritizing payment to BlockFi after FTX emerges from bankruptcy. The remainder is contingent on FTX’s ability to repay its own customers and other creditors before addressing the remaining amount owed to BlockFi. 
<h3 id="span-style-font-weight-400-excellent-outcome-span">‘Excellent’ Outcome</h3> 
BlockFi’s bankruptcy administrators hailed the outcome as an “excellent” one for both BlockFi and its customers. The negotiated agreement, achieved through early mediation, has not only reduced litigation costs but also ensures that funds reserved for litigation with FTX will be directed towards customer distributions. 
BlockFi <a href="https://thecoinrise.com/blockfi-files-for-chapter-11-bankruptcy-in-new-jersey/">filed for Chapter 11 bankruptcy protection on November 28, 2022</a>, attributing its financial challenges to the shock collapse of FTX earlier that month. The two companies had engaged in legal battles throughout 2023, with BlockFi claiming FTX owed it over $1 billion. 
<h2 id="span-style-font-weight-400-blockfi-owes-10b-to-100k-creditors-span">BlockFi Owes $10B to 100K Creditors</h2> 
Despite BlockFi’s bankruptcy, it had also owed FTX.US up to $275 million under a 2022 rescue loan deal. Estimates indicate that BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to the bankrupt crypto hedge fund Three Arrows Capital. 
BlockFi, <a href="https://thecoinrise.com/blockfi-shares-withdrawal-plans-after-emergence-from-bankruptcy/">emerging from bankruptcy in October 2023</a>, took steps to facilitate customer withdrawals by opening a wallet. The settlement with FTX marks a significant step in resolving one of the most complex financial disputes in the cryptocurrency industry. 
The post <a href="https://thecoinrise.com/ftx-settles-with-blockfi-for-874-5m-in-bankruptcy-dispute/">FTX Settles with BlockFi for $874.5M in Bankruptcy Dispute</a> appeared first on <a href="https://thecoinrise.com">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

FTX Settles with BlockFi for $874.5M in Bankruptcy Dispute

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