FTX and Alameda have settled their disputes with BlockFi, agreeing to pay the firm up to $874 million, subject to court approval.
Bankrupt crypto companies FTX and BlockFi have reportedly settled their disputes arising from their collapses in 2022 after the crypto exchange left many companies in a death spiral that has billions of dollars left in limbo. According to the agreement details, FTX will pay BlockFi up to $874.5 million, pending approval by U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, Reuters reports.
The litigation between the two entities started in 2023, with both seeking to recoup funds lent before their joint bankruptcies in November 2022. Under the newly reached settlement, FTX will a $250 million payment to BlockFi, while the remaining sum is contingent on FTX’s efforts to reimburse its customers amidst bankruptcy proceedings.
Additionally, FTX has also committed to pay an extra $185.3 million to BlockFi, representing the amount held by BlockFi in its FTX trading accounts when the exchange collapsed. The distribution percentage for BlockFi’s customers holding interest-bearing accounts varies considerably, with potential recoveries ranging between 39.4% and 100% of their account balances.
As part of the settlement, BlockFi has agreed to drop its lawsuit concerning 56 million Robinhood shares, allegedly pledged as collateral for loans to Alameda Research, FTX’s main market maker. These equity shares were seized by the U.S. Department of Justice following the arrest of FTX founder Sam Bankman-Fried, who’s now facing over 100 years in prison after being convicted on multiple charges related to the collapse of his exchange.