Bankrupt crypto lender BlockFi reportedly reached a $874.5 million in-principle settlement with failed digital currency exchange FTX and Alameda Research estates. This, according to a recent bankruptcy court filing.
BlockFi filed for bankruptcy in November of 2022 following the collapse of multiple crypto firms, culminating in the failure of FTX. BlockFi was once one of the hottest crypto firms in the US, valued at over $3 billion.
Following the court approval of this settlement, BlockFi, which was impacted by the demise of crypto exchange FTX back in 2022 and then proceeded to file for Chapter 11 bankruptcy, will reportedly receive a customer claim against FTX valued at $185.2 million as well as a claim of $689.3 million from Alameda Research (as per the filing).
BlockFi clients are set to receive the said claims at their full value, provided that FTX satisfies its distribution objectives, the filing noted.
And from the $874.5 million, a reported $250 million is to be a secured claim. For this amount, there’s collateral to expedite the payment due to BlockFi following FTX’s reorganization plan (to be approved by the firm’s creditors).
The filing noted that BlockFi ensures that it “will receive that $250 million shortly after the FTX plan is confirmed and goes effective – likely allowing a second interim distribution in the near term.”
FTX had submitted its updated reorganization plan during December of last year, which the firm said reflects compromises meant to offer the ideal outcome for creditors as well as the stakeholders.
This past month, a US bankruptcy court had proceeded to approve a settlement between BlockFi and Three Arrows Capital, another failed digital currency hedge fund that collapsed in spectacular fashion back in 2022.
Although the approval addressed counterclaims, the details pertaining to the actual settlement have not been shared publicly.