BlockFi and the bankrupt FTX have agreed on an "in principle" settlement that will see FTX paying BlockFi up to $874.5 million.
The settlement, awaiting approval from US Bankruptcy Judge John Dorsey, will include FTX forgoing millions in counterclaims against BlockFi.
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BlockFi is set to receive $185.2 million for customer assets held on FTX.com and an additional $689.3 million related to loans that Alameda Research received from BlockFi.
A notable aspect of the agreement is that $250 million of the Alameda claim will be recognized as secured, ensuring this payment is a priority once the plan is approved and goes effective.
BlockFi's bankruptcy administrators have lauded the settlement as a superior outcome, emphasizing the benefits for BlockFi's customers and creditors:
<The plan> ensures that money reserved for litigation with FTX is directed instead to customer distributions.
The resolution between FTX and BlockFi emerges against a backdrop of mutual lawsuits and a complex web of financial entanglements.
BlockFi began its Chapter 11 bankruptcy process in November 2022, citing FTX's collapse as the leading cause. Since then, BlockFi has actively sought to reclaim funds.
As BlockFi navigates its post-bankruptcy phase, having reopened a wallet for customer withdrawals in October 2023, the future holds cautious optimism for stakeholders.
This settlement represents a critical juncture for both BlockFi and FTX, offering a pathway to resolution amidst the crypto industry's broader challenges.
As for FTX's post-bankruptcy situation, the collapsed crypto exchange has initiated a claims process for its major cryptocurrencies, causing dissatisfaction among investors, as the rates are significantly lower than current market values.
