FTX, Alameda $875M Settlement: Hope for BlockFi Creditors
BlockFi customers are on the verge of making significant money. After intense negotiations, BlockFi was able to return to its coffers with FTX and Alameda Research for up to $874 million pending jury approval.
This settlement marks another chapter in the company's bankruptcy proceedings. The collapse of these crypto giants in 2022 could result in the return of affected customers.
A return action for BlockFi lenders
Under the terms of the agreement, FTX agreed to make a priority payment of $250 million to BlockFi. This initial amount is part of a larger $874 million payment designed to compensate BlockFi for assets held on the FTX exchange and loans extended to Alameda Research.
The agreement states that the remaining amount of the settlement depends on FTX's ability to repay its own customers and other creditors, highlighting the associated challenges in the crypto industry's recovery efforts.
Read more: Best BlockFi credit card options
The genesis of this settlement can be traced back to the close relationship between BlockFi and FTX during the crypto market crash of 2022. The crash exposed the widespread misuse of customer funds by FTX. This ultimately led to a series of legal and financial challenges for both parties.
Despite these problems, the two companies have worked to find a solution that allows BlockFi to recover a significant portion of its assets. This increases the chances of getting a full customer back.
FTX works on Klang's back funds
In parallel, FTX's efforts to repatriate funds have made significant progress. It recently approved a stake sale in AI company Anthropic.
This strategic change is expected to inject around $1 billion into FTX's assets. This will be useful to increase the capacity to meet the obligations of creditors. Dave Portnoy of Barstool Sports lamented his recent loss at FTX, saying the bankrupt exchange owed $1 million.
“That fat [expletive] With blonde hair, SBF (Sam Bankman-Fried), that shit; [expletive] I. So FTX owes me like a million,” Pornoi said.
Read more: FTX Collapse Explained: How the Sam Bankman-Fried Empire Fell
Such activities are instrumental to FTX's broader strategy to navigate its bankruptcy proceedings and fulfill its commitments to creditors, including blockchain.
With the court's approval, BlockFi customers may soon witness a major step toward making them whole.
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