The post BlockFi Nears Full Customer Repayment with $874.5 Million FTX and Alameda Claim Agreement appeared first on Coinpedia Fintech News

The impending thirst for debt recovery from the fraudulent and bankrupt FTX and Alameda is almost to be quenched. 

Crypto lender BlockFi has reached an “in principle” agreement with the bankrupt estates of FTX and Alameda Research, signalling a potential full recovery for BlockFi’s customers impacted by the lender’s financial troubles following FTX’s collapse.

Details of the Settlement

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. FTX will also pay $185.3 million to BlockFi because of the amount of funds it held in FTX’s account when it collapsed and filed for bankruptcy in 2022. 

The settlement ensures priority repayment once FTX’s bankruptcy plan gains approval. The settlement simplifies the bankruptcy proceedings for FTX, benefiting both companies and underscoring a commitment to prioritising client recoveries.

BlockFi’s bankruptcy administrators have heralded the agreement as an “excellent outcome” for both the company and its customers, suggesting a more optimistic recovery prospect than initially anticipated.

The settlement agreement has not been made publicly available yet, because it is still subject to approval. Once Judge John Dorsey presiding over U.S. Bankruptcy Court for the District of Delaware approves the settlement, a speedy liquidation and repayment to BlockFi is expected. 

Don’t Keep Your Hopes High

A few days back, FTX’s claim window created confusion and havoc making community members call them out as “robber”. Through PwC, FTX Digital Market’s claim window listed the price for many cryptos like BTC, ETH, SOL and BNB with sell prices much lower than the market price. 

It is to be remembered what an FTX attorney said in January – that although FTX is expected to fully repay its customers, it is not guaranteed. Moreover, BlockFi has also acknowledged the uncertainty, confirming 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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Filed under: Bitcoin - @ March 7, 2024 2:12 am