BlockFi’s Bankruptcy Plans Faces Stiff Opposition From FTX

There is no respite for BlockFi as the bankrupt cryptocurrency lender struggles to pay creditors and customers.

BlockFi has filed several proposals since sliding into bankruptcy last year due to market turmoil. However, FTX’s latest legal release filing It poses a hurdle for the now-defunct company as it accuses BlockFi of abusing its planning process.

• FTX said the newly proposed plan attempts to avoid substantive claims against BlockFi.

However, BlockFi’s debtors believe that some bankruptcy baton can be waived to make the FTX debtor’s claims disappear in the recently amended Chapter 11 Liquidation Plan Incident dated June 28, 2023 (the “Liquidation Plan”),4 and that they could do so without satisfying basic procedural fairness and due process requirements. due legal. This is a misuse of the plan process.”

• FTX also mentioned repayments and guarantees in connection with a loan with its sister trading arm Alameda Research, as well as $1 billion in guarantee covenants made by Emergent Fidelity, a company founded by former chairman Sam Bankman-Fried to hold Robinhood shares.
• The filing also confirmed that BlockFi may have claims against FTX which the latter’s lawyers are expected to contest.
• Along with FTX, Three Arrows Capital (3AC) also opposed BlockFi’s bankruptcy plan and claimed that the latter owed it more than $220 million.
• The Singapore-based cryptocurrency hedge fund previously argued that it was not given the opportunity to contest the fraud allegations. Its liquidators are seeking to recover $1.3 billion from the founders.