BlockFi FTX Settlement Major Step in Bankruptcy Proceedings; Creditors to Receive Funds by August
Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...
Crypto lender BlockFi has reached a significant milestone in its recovery from the FTX collapse. The company has successfully concluded a settlement that will fully compensate its creditors.
The complex legal battle between BlockFi and FTX, marked by numerous counterclaims, has finally been resolved. By selling its claims against FTX at a premium, BlockFi has secured substantial funds to distribute to its customers, bringing a sense of closure to the prolonged dispute.
According to Ken Aulet, an attorney representing the plan administrator, in his interview with Cryptonews.com, this settlement represents a significant step forward in the bankruptcy proceedings. Creditors will receive their funds through in-kind distributions through Coinbase accounts for supported cryptocurrencies, while others will accept cash payments.
In November 2022, BlockFi was severely impacted by the financial turmoil surrounding FTX, a leading cryptocurrency exchange that collapsed in the same month. The collapse of FTX, a significant partner of BlockFi, led to a chain reaction that ultimately forced BlockFi and many other crypto exchanges and projects to file for bankruptcy.
After several legal operations, BlockFi is now undergoing liquidation, and the company will not operate in the future, as Aulet noted. Liquidation involves the sale of all assets and the distribution of the proceeds to creditors. However, the remaining legacy systems will be maintained temporarily to support the liquidation and distribution process.
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