BlockFi Reaches Agreement to Settle $1 Billion in Claims with FTX and Alameda Research
In a significant development, crypto lender BlockFi has reached an โin principleโ agreement with the estates of bankrupt FTX and its trading arm Alameda Research to settle nearly $1 billion in claims. The settlement marks a pivotal moment for BlockFiโs recovery efforts and its clientsโ potential for maximum asset recovery. The successful resolution of these claims significantly impacts BlockFiโs customer recoveries and paves the way for the proposed reorganization plan.
BlockFi To Receive Maximum Value On Customer Claims
According to the agreement, BlockFi will receive an allowed customer claim of $185.2 million against FTX.com, representing the full value of its assets on the FTX exchange as of the FTX petition date. In addition, BlockFi will have a $689.3 million claim against Alameda Research for loans made, of which $250 million will be treated as a secured claim. Any claims asserted by FTX against BlockFi to reduce or offset these amounts will be waived. The settlement ensures that FTX recognizes the full amount owed, enabling maximum value to be received for BlockFiโs claims.
The agreement also secures the $250 million secured claim, ensuring an expedited cash payment shortly after FTXโs plan is confirmed and effective. The resolution of the FTX claims allows for a substantial portion of the litigation reserve to be released, further enhancing BlockFi customer recoveries in an anticipated second interim distribution.
FTX Founderโs Legal Troubles
While BlockFi emerges from bankruptcy with a favorable outcome for its customers, recent legal proceedings against FTX founder Sam Bankman-Fried have cast a shadow over the cryptocurrency exchange. Following a five-week trial, Sam Bankman-Fried was found guilty of all seven counts of defrauding his customers and lenders. The charges carry a potential conviction of up to 110 years in prison, underscoring the severe legal consequences faced by prominent figures in the crypto industry.
As the FTX plan progresses and additional distributions are prepared under BlockFiโs confirmed Chapter 11 plan, the Plan Administrator will continue to monitor the proceedings and provide updates to customers. The emergence from bankruptcy and resolution of claims against FTX and Alameda Research mark a significant turning point for BlockFi and its customers.
FTT Trading Update
As of the latest update, FTXโs native token, FTT, is currently trading at $2.59. While it has experienced a 3% correction in the last 24 hours, it had shown noteworthy gains over the past fourteen and thirty-day periods with increases of over 46% and 62%, respectively.
Disclaimer: This article is not financial advice. The information provided is for educational purposes only and should not be considered as investment advice. Cryptocurrency investments are subject to market risks. Please do your research before making any investment decisions.
Hot Take: BlockFi Settles $1 Billion in Claims with FTX and Alameda Research
In a significant development, crypto lender BlockFi has reached an โin principleโ agreement with bankrupt FTX and Alameda Research to settle nearly $1 billion in claims. This settlement marks a pivotal moment for BlockFiโs recovery efforts and its clientsโ potential for maximum asset recovery. BlockFi will receive an allowed customer claim of $185.2 million against FTX.com, representing the full value of its assets on the FTX exchange as of the petition date. Additionally, BlockFi will have a $689.3 million claim against Alameda Research for loans made, of which $250 million will be treated as a secured claim. The settlement ensures that FTX recognizes the full amount owed, enabling maximum value to be received for BlockFiโs claims. However, recent legal proceedings against FTX founder Sam Bankman-Fried have cast a shadow over the cryptocurrency exchange. He was found guilty of defrauding his customers and lenders, facing potential conviction of up to 110 years in prison. As the FTX plan progresses, BlockFi will continue to monitor the proceedings and provide updates to customers.
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