FTX and BlockFi have received the approval to resume
proceedings for the negotiation of claims settlement in the aftermath of
BlockFi’s bankruptcy filing last year. This step allows FTX to present
its arguments, paving the way for a potential settlement between the two firms.
BlockFi filed for bankruptcy in November 2022,
citing the effects of FTX’s sudden collapse as a significant factor. After the court paused the proceedings for claims settlement, BlockFi was left with
approximately $355 million on FTX’s platform and an additional $671
million owed by FTX’s sister company, Alameda Research, Coindesk reported.
US bankruptcy judge Michael Kaplan modified the court orders on November 13, allowing FTX’s debtors to engage in discussions regarding
claims settlement . This permitted FTX to present its defense, counterclaims, and
setoffs concerning BlockFi’s claims in the ongoing bankruptcy proceedings.
Recently, in the case that found FTX’s Former CEO
guilty of fraud and money laundering charges, BlockFi’s CEO, Zac Prince,
testified. Prince testified against Bankman-Fried,
highlighting how BlockFi’s bankruptcy directly resulted from its association with
FTX and Alameda Research.
In September, BlockFi’s creditors approved a
bankruptcy restructuring plan. This plan aimed to recoup losses from the fallout of FTX
and the collapse of crypto hedge fund Three Arrows Capital. Prince
disclosed to the jury that BlockFi’s association with FTX allegedly led to
losses exceeding “a little over a billion dollars.”
Prince pointed to loan agreements with Alameda,
which started in 2020 and 2021. The crypto lender had extended up to USD $1 billion to
Alameda by May 2022. Subsequently, Alameda Research repaid the
initial loan in full and BlockFi extending new loans amounting to USD
$850 million.
Links with FTX and Alameda Research
BlockFi’s financial troubles escalated with the
collapse of the Terra Luna crypto ecosystem, leading to significant losses. To
recover, BlockFi sought repayment of its loans from Alameda, initiating a
process that eventually unfolded into a billion-dollar loss.
BlockFi offered interest-bearing crypto-lending products prior to filing for bankruptcy last year. An accidental leak of the firm’s data showed the depth of BlockFi’s financial troubles. This affected its user base of
662,427, with a majority having balances below $1,000.
Last year, BlockFi sued Bankman-Fried’s Emergent Fidelity Technologies. The lawsuit, filed in the United States Bankruptcy
Court for the District of New Jersey, revolves around the seizure of Robinhood
shares pledged as collateral to BlockFi.
FTX and BlockFi have received the approval to resume
proceedings for the negotiation of claims settlement in the aftermath of
BlockFi’s bankruptcy filing last year. This step allows FTX to present
its arguments, paving the way for a potential settlement between the two firms.
BlockFi filed for bankruptcy in November 2022,
citing the effects of FTX’s sudden collapse as a significant factor. After the court paused the proceedings for claims settlement, BlockFi was left with
approximately $355 million on FTX’s platform and an additional $671
million owed by FTX’s sister company, Alameda Research, Coindesk reported.
US bankruptcy judge Michael Kaplan modified the court orders on November 13, allowing FTX’s debtors to engage in discussions regarding
claims settlement . This permitted FTX to present its defense, counterclaims, and
setoffs concerning BlockFi’s claims in the ongoing bankruptcy proceedings.
Recently, in the case that found FTX’s Former CEO
guilty of fraud and money laundering charges, BlockFi’s CEO, Zac Prince,
testified. Prince testified against Bankman-Fried,
highlighting how BlockFi’s bankruptcy directly resulted from its association with
FTX and Alameda Research.
In September, BlockFi’s creditors approved a
bankruptcy restructuring plan. This plan aimed to recoup losses from the fallout of FTX
and the collapse of crypto hedge fund Three Arrows Capital. Prince
disclosed to the jury that BlockFi’s association with FTX allegedly led to
losses exceeding “a little over a billion dollars.”
Prince pointed to loan agreements with Alameda,
which started in 2020 and 2021. The crypto lender had extended up to USD $1 billion to
Alameda by May 2022. Subsequently, Alameda Research repaid the
initial loan in full and BlockFi extending new loans amounting to USD
$850 million.
Links with FTX and Alameda Research
BlockFi’s financial troubles escalated with the
collapse of the Terra Luna crypto ecosystem, leading to significant losses. To
recover, BlockFi sought repayment of its loans from Alameda, initiating a
process that eventually unfolded into a billion-dollar loss.
BlockFi offered interest-bearing crypto-lending products prior to filing for bankruptcy last year. An accidental leak of the firm’s data showed the depth of BlockFi’s financial troubles. This affected its user base of
662,427, with a majority having balances below $1,000.
Last year, BlockFi sued Bankman-Fried’s Emergent Fidelity Technologies. The lawsuit, filed in the United States Bankruptcy
Court for the District of New Jersey, revolves around the seizure of Robinhood
shares pledged as collateral to BlockFi.
