BlockFi, FTX, and Alameda Research have reached a significant settlement worth $874.5 million to aid in repaying customers impacted by BlockFi’s bankruptcy. The agreement, as outlined in a recent court filing from the United States Bankruptcy Court for the District of New Jersey, involves a structured arrangement where BlockFi will receive claims against FTX totaling $185.2 million and claims against Alameda Research amounting to $689.3 million. Notably, a portion of $250 million from the total sum will be designated as a secured claim.
The purpose of this allocation is to streamline the distribution of funds to BlockFi’s customers, a crucial step towards addressing the financial hurdles stemming from its Chapter 11 bankruptcy proceedings. The resolution is designed to bolster BlockFi’s ability to back the proposed reorganization plan by the FTX Debtors, ultimately moving the FTX case closer to resolution and payment of BlockFi’s allowed claims.
In a previous agreement reached in September 2023 between BlockFi and the FTX Debtors, FTX agreed to waive a significant portion of its claims for affirmative recoveries, setting the stage for the current settlement. The repayment plan prioritizes customers, ensuring that they stand to benefit substantially from the agreement, with the potential for full recovery of specific claims. The structured nature of the arrangement, particularly the secured interest in a portion of the Alameda Loan Claim, accelerates payments for secured claims ahead of unsecured ones, expediting customer payouts and reducing risks as FTX progresses with its reorganization efforts.
The court filing emphasizes the positive outcome of the negotiated settlement, highlighting the comprehensive recovery of claims and the favorable terms for BlockFi and its customers. The early mediation process has not only minimized litigation costs but also redirected resources towards customer distributions, underscoring a strategic and customer-centric approach to resolving the financial challenges faced by BlockFi.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
