BlockFi, a bankrupt crypto lender, has reportedly reached a preliminary agreement with the estates of FTX and Alameda Research, potentially securing nearly $1 billion. The agreement, outlined in a recent court filing, could lead to full recovery for BlockFi’s customers affected by FTX’s collapse.
According to the settlement, BlockFi is set to receive $874.5 million in claims against FTX and Alameda Research. Of this amount, $250 million will be treated as a secured claim, prioritizing BlockFi’s payment after FTX’s bankruptcy plan, filed in December, is approved by creditors.
In return, FTX will drop its claims against BlockFi, allowing BlockFi’s remaining claims to be paid out alongside similar claims under FTX’s approved plan. However, the agreement is subject to approval by a judge.
The relationship between FTX, Alameda, and BlockFi has been complex. BlockFi had received a $400 million line of credit from FTX, and FTX, under its legal name West Realm Shires, was one of BlockFi’s largest creditors with a $275 million claim.
In a statement, BlockFi’s bankruptcy administrators described the negotiated agreement as a favorable outcome, ensuring that funds earmarked for litigation with FTX will instead be directed towards customer distributions.
