BlockFi has reached a settlement with FTX and Alameda Research that will see it receive $874.5 million to help repay customers affected by the bankruptcy.
According to a recent filing by the U.S. Bankruptcy Court for the District of New Jersey, BlockFi will receive a combination of claims against FTX worth $185.2 million and $689.3 million against Alameda Research.
In addition, it will be allowed to establish a $250 million secured claim out of the total amount.
BlockFi’s settlement with FTX
In order to facilitate the transfer of funds to BlockFi‘s customers, the allocation was a significant step toward resolving the financial problems arising from Chapter 11 bankruptcy proceedings .
The filing said, “BlockFi can support the proposed plan of reorganization proposed by the FTX debtors and help bring the FTX case to a conclusion – and move closer to repayment of the included BlockFi claims.”
September 2023. BlockFi and FTX’s debtors reached a preliminary agreement under which FTX dropped most of its recovery claims.
Repayment plan to ensure priority treatment of customers
According to the court, the agreement would be highly beneficial to BlockFi and its customers, exceeding expectations. “This negotiated agreement … represents an excellent outcome,” the – the filing said, ensuring full recovery of certain claims.
The solution allowed customers to receive the full value of the claim , assuming FTX meets its distribution plans.
In addition, unsecured claims paid off faster due to the secured interest on the Alameda portion of the loan claim. Providing faster payouts to customers and reducing risk as FTX’s reorganization progressed.
The filing reads: “This result was achieved through early mediation.” “Significantly reducing the cost of litigation and ensuring that the money set aside for litigation with FTX is directed to customer distribution.”
