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FTX, Alameda reaches ‘in principle’ settlement with BlockFi, paying $874M
The bankrupt crypto companies have resolved their disputes for nearly $1 billion, which could lead to full recovery for BlockFi’s customers.
Bankrupt crypto firms BlockFi and FTX have reached an “in principle” agreement to settle their disputes, with FTX agreeing to pay up to $874.5 million to BlockFi and drop its claims against the f, according to a March 6 court filing.
Terms of the settlement are subject to approval by U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware.
The settlement would resolve BlockFi’s claims against FTX, totaling approximately a billion dollars, and will also see FTX waive "millions of dollars of avoidance claims and other counterclaims" against BlockFi.
The $874.5 million is made up of a $185.2 million claim against FTX.com — which represents the value of BlockFi customer assets held on the exchange — along with a $689.3 million claim against Alameda Research for the loans it received from BlockFi.
The proposed settlement states that $250 million of the total sum will be treated as a “secured claim,” which will prioritize payment to BlockFi after FTX emerges from bankruptcy. The remainder is contingent on FTX’s ability to first repay its own customers and other creditors.
BlockFi’s bankruptcy administrators said the result has been achieved with an “early mediation” which has cut litigation costs and ensures “that money reserved for litigation with FTX is directed instead to customer distributions.”
"This negotiated agreement represents an excellent outcome for BlockFi and its customers – one better than could have been anticipated even on the effective date of the Plan.”
BlockFi filed for Chapter 11 bankruptcy protection on Nov. 28, 2022, citing exposure to the shock collapse of FTX earlier that month.
The two companies had sued each other in 2023
BlockFi said FTX owed it over $1 billion which came from a $400 million line of credit in and nearly $900 million lent to Alameda Research.$BTC $ETH $BNB
