BlockFi to Receive $874.5 Million From Settlement with FTX and Alameda Research

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BlockFi to Receive $874.5 Million From Settlement with FTX and Alameda Research

BlockFi has finalized a settlement with FTX and Alameda Research to receive $874.5 million to help repay customers affected by its bankruptcy.

According to a recent court filing by the United States Bankruptcy Court for District of New Jersey, the comprehensive agreement detailed that BlockFi will obtain a mix of claims against FTX valued at $185.2 million and claims against Alameda Research amounting to $689.3 million.

Besides, $250 million of the total amount will be entitled to be treated as a secured claim.

BlockFi’s Settlement with FTX

The allocation was intended to facilitate the distribution of funds to BlockFi’s customers, marking a significant step towards resolving the financial challenges posed by its Chapter 11 bankruptcy proceedings.

“This resolution allows BlockFi to support the proposed plan of reorganization proposed by the FTX Debtors, and assist in pushing the FTX case to a close – and closer to payment on BlockFi’s allowed claims,” the filing reads.

In September 2023, BlockFi and the FTX Debtors arrived at an initial agreement whereby FTX consented to relinquish almost all of its claims for affirmative recoveries.

Repayment Plan to Prioritize Customers

According to the court, the agreement would be highly favorable for BlockFi and its customers, exceeding expectations. “This negotiated agreement…represents an excellent outcome,” the filing stated, ensuring complete recovery of specific claims.

This arrangement positioned customers to receive full claim values, assuming FTX fulfills its distribution plans.

Furthermore, the secured interest in part of the Alameda Loan Claim accelerated payments over unsecured claims. “Obtaining recognition of BlockFi’s security interest…entitles BlockFi to payment of that amount prior to payment of unsecured claims,” allowing quicker customer payouts and mitigating risks as FTX advances its reorganization.

“This result has been achieved with an early mediation,” the filing claimed. “Significantly cutting litigation costs and ensuring that money reserved for litigation with FTX is directed instead to customer distributions.”

The post BlockFi to Receive $874.5 Million From Settlement with FTX and Alameda Research appeared first on Cryptonews.

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