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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Mar 07, 2024 02:12 UTC
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BlockFi Secures $1 Billion Deal with Bankrupt FTX, Customers Eye Full Repayment
BlockFi struck a deal with the bankrupt FTX and Alameda to potentially recover nearly $1 billion.
The agreement prioritizes BlockFi's repayment once FTX's bankruptcy plan is approved, simplifying the process for both companies.
BlockFi sees it as a positive step towards a better-than-expected outcome.
The impending thirst for debt recovery from the fraudulent and bankrupt FTX and Alameda is almost to be quenched.
Crypto lender BlockFi has reached an “in principle” agreement with the bankrupt estates of FTX and Alameda Research, signalling a potential full recovery for BlockFi’s customers impacted by the lender’s financial troubles following FTX’s collapse.
A Billion-Dollar Breakthrough
This game-changing deal, valued at close to $1 billion, positions BlockFi to claim a substantial $874.5 million from FTX and Alameda. Notably, $250 million is secured, emphasizing the significance of this financial turning point. FTX is set to add $185.3 million, acknowledging funds held when it filed for bankruptcy in 2022.
The agreement streamlines FTX’s bankruptcy proceedings, promising BlockFi priority repayment upon approval of FTX’s bankruptcy plan. This alignment reflects a shared commitment to prioritizing the recovery of affected clients.
Deemed an “excellent outcome” by BlockFi’s administrators, the agreement injects a dose of optimism, defying earlier gloomy forecasts and pointing towards a brighter recovery for both company and customers.
A Swift Resolution
The settlement agreement has not been made publicly available yet, because it is still subject to approval. Once Judge John Dorsey presiding over U.S. Bankruptcy Court for the District of Delaware approves the settlement, a speedy liquidation and repayment to BlockFi is expected.
Controversy Ignited
Recent turmoil surrounds FTX’s claim window, labeled by the community as potential “robbery.” PwC’s involvement listed crypto prices, including BTC, ETH, SOL, and BNB, at sell prices considerably lower than market rates, causing a stir.
Despite positive strides, uncertainties persist. Echoing earlier warnings, FTX’s full customer repayment isn’t guaranteed. BlockFi, too, acknowledges uncertainty, hinting at potential returns for interest-bearing accounts ranging from 39.4% to an optimistic 100%.
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