US Judge Approves Confidential BlockFi-3AC Settlement; BlockFi Resumes Creditor Payments
Summary:
A US judge has sanctioned a confidential settlement between cryptocurrency lender BlockFi and the defunct hedge fund Three Arrows Capital (3AC). This puts an end to a legal dispute over mutual debt claims and allows BlockFi to continue with creditor repayments. The judge also approved BlockFi's amended Chapter 11 and customer repayment plan. The agreement details stay confidential to protect trade strategies and respect 3AC's foreign bankruptcy process. BlockFi owes up to $10 billion to over 100,000 creditors, and reportedly has $1.2b exposure to FTX.
A US court judge has given the green light to a settlement that serves to end the disagreements between BlockFi, a cryptocurrency lending firm, and a now-collapsed crypto hedge fund Three Arrows Capital (3AC), stipulating that the settlement details be kept confidential. The decision was made by Judge Michael Kaplan of the New Jersey Bankruptcy Court on February 6, to halt any further courtroom battles as BlockFi pursued 3AC for $129 million which it claimed was owed, while 3AC fired back, alleging BlockFi owed them $280 million. Despite the insistence of the US Trustee that the settlement terms be made public due to the debtors' lack of rationale for secrecy, Judge Kaplan chose to keep the agreement under wraps, stating that to unveil it would be "counterproductive". As part of its request to keep select information confidential, BlockFi maintained that the terms could adversely affect litigation against the bankrupt FTX crypto exchange due to their commercial sensitivity. Photo of the objection against sealing settlement details. Source: KrollThe court supported BlockFi's request for secrecy in order to safeguard settlement strategies and honour 3AC's foreign bankruptcy proceedings. The clearance of the settlement enables BlockFi to progress with payments to the lending estate's creditors, a principal motive for its push for swift consent. In September 2023, Judge Kaplan stamped his approval on BlockFi's updated Chapter 11 and customer payment plan, paving the way for the company's liquidation. Estimations suggested that BlockFi was in debt to more than 100,000 creditors to the tune of up to $10 billion, including $1 billion to its biggest three creditors and $220 million to 3AC. Related: Alleged financial details of BlockFi reveal $1.2B exposure to FTX. Three Arrows Capital tanked in June 2022, and BlockFi fell into bankruptcy later that year in November after FTX's decline. Earlier this month, OPNX, a crypto bankruptcy claims platform established by 3AC's co-founders Su Zhu and Kyle Davies, declared it will terminate all operations and close shop by February 14. Magazine: Bitcoin ETF likely to break records, according to Brett Harrison (ex-FTX US), X Hall of Flame.
Published At
2/7/2024 7:04:57 AM
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