United

Brett (SOL)

Davies

A settlement resolving claims and disputes between crypto lender BlockFi and defunct crypto hedge fund Three Arrows Capital (3AC) was approved by a United States judge, who ordered that the details remain sealed.
In a Feb. 6 hearing, New Jersey Bankruptcy Court Judge Michael Kaplan approved a settlement between the companies to prevent further legal dueling as BlockFi claimed 3AC owed it $129 million, while the hedge fund claimed BlockFi owed it $280 million. 
Kaplan declined to unseal the settlement agreement, stating it would be “counter-intuitive” to do so and rebutted the U.S. Trustee’s objection to the seal that argued the terms should be disclosed because the debtors had not justified the need to seal the settlement. 
However, BlockFi’s motion to seal certain information argued that the terms are commercially sensitive and could impact litigation against bankrupt crypto exchange FTX. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-02/33ba70cb-40df-4e67-a395-b0fb5b93daa2.jpg" alt="" title="">
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 Excerpt from the objection to the motion to seal settlement details. Source: Kroll
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</figure>
The court granted the motion to seal, citing the need to protect settlement strategies and respect comity with 3AC’s foreign bankruptcy proceedings.
Approval of the settlement allows BlockFi to move forward with distributions from the lending estate to creditors — a key reason it sought quick approval.
Kaplan <a href="https://cointelegraph.com/news/crypto-lender-block-fi-liquidation-plan-approval-repay-customer"></a><a href="https://cointelegraph.com/news/crypto-lender-block-fi-liquidation-plan-approval-repay-customer">approved BlockFi’s amended Chapter 11</a> and customer repayment plan in September 2023, when the firm was cleared for liquidation. 
Estimates at the time showed that BlockFi owed up to $10 billion to over 100,000 creditors. This included $1 billion to its three largest creditors and $220 million to 3AC. 
Related: <a href="https://cointelegraph.com/news/blockfi-reportedly-posts-uncensored-financials-revealing-1-2-billion-ftx-exposure">BlockFi uncensored financials reportedly shows $1.2B FTX exposure</a> 
Three Arrows Capital collapsed in June 2022, and BlockFi filed for bankruptcy in late November 2022 following the fall of FTX.
Earlier in February, crypto bankruptcy claims platform OPNX — launched by 3AC co-founders <a href="https://cointelegraph.com/news/three-arrows-capital-su-zhu-enjoyed-best-sleep-in-prison">Su Zhu</a> and Kyle Davies — announced that it would <a href="https://cointelegraph.com/news/three-arrows-capital-opnx-exchange-shutting-down-february">officially cease all operations</a> and shut down by Feb. 14. 
Magazine: <a href="https://cointelegraph.com/magazine/expect-records-broken-by-spot-bitcoin-etf-brett-harrison-ex-ftx-us-x-hall-of-flame/">Expect ‘records broken’ by Bitcoin ETF: Brett Harrison (ex-FTX US), X Hall of Flame</a>

BlockFi and 3AC settlement deal gets judge’s go-ahead but remains sealed

Cointelegraph

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