- BlockFi has reached an in-principle agreement to settle with FTX and Alameda Research.
- FTX and Alameda have agreed to pay up to $874 million to BlockFi, in an attempt to settle the lender’s financial claims.
- The lender will receive $185.2 million regarding asset holdings in FTX and $689.3 million regarding Alameda’s loans.
A recent court filing has announced the “successful resolution” of the digital asset lender BlockFi’s financial claims against the bankrupt FTX. Reportedly, the asset lender has reached an “in principle” agreement of nearly $1 billion with FTX and Alameda Research.
According to the court filing, FTX has agreed to pay up to $874 million in a bid to settle BlockFi’s claims. The filing read,
BlockFi will receive an allowed customer claim of $185.2 million against FTX.com on account of its assets on the FTX exchange and a claim of $689.3 million against Alameda Research on account of BlockFi’s loans to Alameda Research of which $250 million is entitled to be treated as a secured claim.
BlockFi was a lender of FTX’s sister firm Alameda Research. During a previous trial of FTX founder Sam Bankman-Fried, BlockFi’s former CEO, Zac Prince, revealed that the platform lost almost $1 billion due to the fall of FTX. He added that BlockFi gave several loans to Alameda, without knowing that FTX was using customer funds.
As Prince asserts, Alameda owed BlockFi about $650 million at the time of FTX’s collapse. In addition, BlockFi’s $350 million funds were allegedly held by FTX. Prince added that BlockFi filed for bankruptcy after learning that its funds could not be retrieved from FTX and Alameda.
The recent development is part of FTX’s attempts to repay its customers and creditors. According to the exchange’s reimbursement plan, FTX envisions concentrating completely on returning its customer funds, having abandoned prior rebooting plans.
The court filing guarantees only the initial $250 million in repayment to BlockFi, the rest of the payment depends on FTX’s ability to repay its own customers and creditors. The filing clarified, “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.”
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