FTX and BlockFi Permitted to Negotiate Claims Amid Ongoing Bankruptcy Cases
Summary:
Bankrupt crypto firms FTX and BlockFi have been granted permission to continue claim settlement negotiations. Following the collapse of FTX, both companies filed for Chapter 11 bankruptcy in November 2022. FTX debtors can now proceed with their issues regarding BlockFi claims within the FTX bankruptcy proceedings. BlockFi CEO, Zac Prince, provided evidence that the company wouldn't have needed to file bankruptcy if FTX hadn't collapsed. BlockFi has started repaying its U.S. Wallet customers, and is beginning to allow withdrawals.
Crypto companies FTX and BlockFi, both facing bankruptcy, have obtained permission to continue negotiation for claims resolving, as per a recent court document. U.S bankruptcy judge Michael Kaplan ruled, on Nov.13, the termination of an automatic halt imposed on proceedings between the disputed companies. FTX debtors are now free to pursue their issues relating to BlockFi claims within the FTX bankruptcy process.
The firms registered for Chapter 11 bankruptcy status in November 2022 following the collapse of FTX earlier in the month. It is believed that BlockFi experienced a funds freeze on the FTX platform approximately worth $355 million, along with an outstanding $671 million from Alameda Research. Furthermore, the ruling stated that FTX debtors would be ineligible to "receive a positive distribution from BlockFi Debtors" and both parties should promptly log a mediation in the Delaware Bankruptcy Court. Once submitted, the mediation process should commence "no later" than Dec. 24, 2023.
Zac Prince, BlockFi CEO, testified against former FTX CEO Sam Bankman-Fried in his criminal trial spanning five weeks where he was convicted on all seven counts. On Oct. 13, Prince and the BlockFi team provided evidence indicating that if FTX had not failed, BlockFi wouldn't have been required to file for bankruptcy, despite the prevailing bear market. The company reported a loss of "just over a billion dollars."
In August, the court consented for BlockFi to pay back its American Wallet clients, although withdrawals were still restricted at the time. Subsequently, in September, BlockFi creditors agreed to a bankruptcy restructuring plan which then received court approval on Sept. 26. As of Oct. 24, BlockFi announced in a blog post that it will start repaying some of its creditors and that withdrawals "are now feasible for nearly all Wallet customers."
In related news, two years after John McAfee's death, his widow Janice is reportedly broke and seeking answers.
Published At
11/14/2023 1:36:50 PM
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