BlockFi and FTX have informally resolved their disagreements, with FTX agreeing to pay BlockFi up to $874.5 million, according to a court filing on March 6.
The agreements are subject to approval by Judge John Dorsey of the US Bankruptcy Court in Delaware. The settlement reinstates BlockFi’s claims against FTX valued around $1 billion, while simultaneously withdrawing “millions of dollars” in counterclaims.
In the settlement, $185.2 million is allocated to a claim against FTX.com, which corresponds to BlockFi client assets, and $689.3 million to a claim against Alameda Research for loans received.
The deal allocates $250 million as a secured claim for BlockFi, with the remaining amount based on FTX’s capacity to pay customers and other creditors. The bankruptcy administrators assert that early mediation lowered litigation expenses and that the funds went straight to consumer distributions.
BlockFi filed for Chapter 11 in November 2022, citing FTX’s failure as one of the causes. Even with the agreement, BlockFi may be required to pay up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to Three Arrows Capital, a bankrupt cryptocurrencycurrency hedge fund.
The settlement between BlockFi and FTX is a significant step toward resolution, potentially reducing damages for both parties and providing optimism for creditors in the complex cryptocurrency world.
