BlockFi and 3AC’s settlement agreement will receive a judge’s approval but remains sealed
Claims and disputes between crypto lender BlockFi and active crypto hedge fund Three Arrows Capital (3AC) have been approved by a US judge, who ordered the details to remain sealed.
In a Feb. 6 hearing, New Jersey Bankruptcy Court Judge Michael Kaplan said a settlement between the companies said BlockFi owes 3AC $129 million, while hedge fund BlockFi owes $280 million.
Kaplan refused to rescind the settlement agreement, saying it would be “retaliatory” to do so and rejected the US trustee's objection to sealing, saying the agreement must be disclosed because the debtors had not proven that the settlement process required sealing.
However, BlockFi argued that its request to publish certain information could affect the contract's commercial nature and the litigation against bankrupt crypto exchange FTX.
The court granted the winding-up motion, citing the importance of preserving settlement mechanisms and complying with 3AC's foreign bankruptcy process.
The deal approval will allow BlockFi to move forward with distributions from the lender's assets to lenders — a key reason it sought expedited approval.
Kaplan approved BlockFi's revised Chapter 11 and client payment plan in September 2023.
Estimates at the time showed BlockFi owed up to $10 billion to more than 100,000 creditors. That adds up to $1 billion for the three biggest lenders and $220 million to 3AC.
Related: BlockFi Reportedly Reveals Unfiltered Financials Reveals $1.2B FTX Exposure
Three Arrows Capital collapsed in June 2022, and BlockFi filed for bankruptcy in November 2022 following the collapse of FTX.
In early February, crypto loss claims platform OPNX – started by 3AC co-founders Su Zhou and Kyle Davis – announced that it would officially cease all operations and be closed until February 14th.
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