BlockFi Approaches Complete Customer Repayment as FTX and Alameda Reach $874.5 Million Claim Settlement

The imminent thirst for debt recovery from the fraudulent and bankrupt FTX and Alameda is on the verge of being satisfied.
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Crypto lender BlockFi has reached a preliminary agreement with the bankrupt estates of FTX and Alameda Research, indicating the possibility of a complete recovery for BlockFi’s customers affected by the lender’s financial troubles following FTX’s collapse.
Settlement Details
Valued at nearly $1 billion, the deal positions BlockFi to receive $874.5 million in claims against the two entities, with $250 million designated as a secured claim. Additionally, FTX will pay $185.3 million to BlockFi due to the amount of funds it held in FTX’s account at the time of its collapse and bankruptcy filing in 2022.
The settlement ensures priority repayment once FTX’s bankruptcy plan is approved. It simplifies the bankruptcy proceedings for FTX, benefiting both companies and emphasizing a commitment to prioritizing client recoveries.
BlockFi’s bankruptcy administrators have praised the agreement as an “excellent outcome” for both the company and its customers, indicating a more optimistic recovery outlook than originally anticipated.
The settlement agreement is not yet publicly available as it is still pending approval. Once Judge John Dorsey, presiding over the U.S. Bankruptcy Court for the District of Delaware, approves the settlement, a swift liquidation and repayment to BlockFi can be expected.
Don’t Get Your Hopes Up
Robber
— moon (@Vietanh7777)
March 2, 2024
A few days ago, FTX’s claim window caused confusion and chaos, leading community members to accuse them of being “robbers.” Through PwC, FTX Digital Market’s claim window listed prices for cryptocurrencies like BTC, ETH, SOL, and BNB that were significantly lower than the market price.
It is important to remember what an FTX attorney stated in January – while FTX is expected to fully repay its customers, it is not guaranteed. Furthermore, BlockFi has also acknowledged the uncertainty and confirmed that full repayment to customers is unlikely. BlockFi estimates potential returns ranging from 39.4% to 100% for interest-bearing BlockFi accounts.
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