US Judge Approves Sealed Settlement Between BlockFi and Three Arrows Capital
A settlement has been approved by a US judge to resolve the claims and disputes between crypto lender BlockFi and defunct crypto hedge fund Three Arrows Capital (3AC). The details of the settlement remain undisclosed, as ordered by Judge Michael Kaplan during a hearing in the New Jersey Bankruptcy Court. This approval aims to put an end to the ongoing legal battles between the two companies. BlockFi claimed that 3AC owed them $129 million, while the hedge fund argued that BlockFi owed them $280 million.
Judge Says Unsealing Would be Counter-Intuitive
Although the settlement agreement remains sealed, Judge Kaplan defended the decision, stating that unsealing the details would be counter-intuitive. The judge also rejected the objection raised by the U.S. Trustee, which argued for the disclosure of the terms. BlockFi had filed a motion to seal certain information, citing its commercial sensitivity and potential impact on the litigation involving bankrupt crypto exchange FTX. The court granted BlockFi’s motion to seal, emphasizing the importance of protecting settlement strategies and respecting the foreign bankruptcy proceeding of 3AC.
With the settlement now approved…
With the settlement now approved, BlockFi can proceed with the distribution of assets from the lending estate to its creditors, a crucial step that prompted the company to seek swift approval. Judge Kaplan had previously approved BlockFi’s amended Chapter 11 and customer repayment plan in September 2023 when the company received clearance for liquidation. At that time, it was estimated that BlockFi owed over $10 billion to more than 100,000 creditors, including $1 billion to its three largest creditors and $220 million to 3AC. Three Arrows Capital collapsed in June 2022, while BlockFi filed for bankruptcy in November 2022 following the downfall of FTX.
3AC Co-Founder Arrested on Flee Attempt
In October last year, Su Zhu, the co-founder Three Arrows Capital (3AC), was arrested in Singapore while attempting to flee. According to a disclosure made by Teneo, the fund’s liquidator, Zhu was detained at the Changi airport after a committal order was issued on him and his business partner, Kyle Davies. Zhu and Davies were sentenced to four months in prison through a committal order for contempt of court. The former Three Arrow executives were issued subpoenas to cooperate with the investigations and activities of Teneo in unraveling issues that led to the implosion of the fund. Although active on social media in the aftermath of the collapse, Zhu and Davies remain on the run from the firm’s liquidators and authorities.
Hot Take: US Judge Approves Sealed Settlement Between BlockFi and Three Arrows Capital
A US judge has given approval to a sealed settlement between BlockFi and Three Arrows Capital. This decision comes after ongoing legal battles between the two companies over millions of dollars owed. While the details of the settlement remain undisclosed, it has been defended by Judge Kaplan as being necessary and counter-intuitive to unseal them. This settlement approval allows BlockFi to proceed with asset distribution to its creditors, a crucial step for the company’s financial recovery. Meanwhile, one of Three Arrows Capital’s co-founders has been arrested for attempting to flee, adding another layer of complexity to this already tumultuous situation.
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