coindesk.com
BlockFi has settled with the estates of FTX and Alameda Research for nearly $1 billion dollars.
The three companies had a long and complicated relationship, but this settlement brings BlockFi closer to full recovery for customers.
Bankrupt crypto lender BlockFi, which was caught in the contagion of FTX and declared bankruptcy days after the exchange's collapse, has reached an "in principle" agreement with the estates of FTX and Alameda Research for nearly $1 billion, according to a recent court filing, which could lead to full value recovery for BlockFi's customers.
Under the settlement, BlockFi will receive a total of $874.5 million in claims against FTX and Alameda Research. $250 million will be treated as a secured claim, which will prioritize payment to BlockFi after FTX plan to end bankruptcy, which was filed in December, is approved by its creditors.
In turn, FTX will drop its claims against BlockFi, allowing BlockFi's remaining claims to be paid out like other similar claims under FTX's plan according to the settlement. A judge still needs to sign off on the agreement.
FTX, Alameda, and BlockFi had a complicated and intertwined relationship. BlockFi received a $400 million line of credit from FTX, and FTX, under its legal name West Realm Shires, was one of BlockFi's largest creditors with a $275 million claim.
"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's bankruptcy administrators wrote in the filing. "[This Plan] ensures that money reserved for litigation with FTX is directed instead to customer distributions."