Bankrupt crypto firms FTX and BlockFi settle for $874 million

Cryptocurrency companies FTX and BlockFi have made a possible settlement deal worth up to $874 million according to reuters. 

The deal, which was turned in to the court on Wednesday, is meant to settle the financial problems that arose when both companies went out of business in November 2022.

Although BlockFi is eligible to receive up to $689 million from FTX as repayment for the Alameda loans, the guarantee remains limited to the first $250 million. 

According to court documents filed in bankruptcy courts in Delaware and New Jersey, the remaining amount is subject to FTX’s capacity to repay its own creditors and customers.

Before they both went out of business, FTX and BlockFi had loan operations. This settlement is supposed to take care of these unsettled businesses they had. 

Furthermore, FTX also agreed to pay BlockFi an extra $185.3 million to make up for customer assets that were in FTX accounts when the company went bankrupt.

In other news, FTX has opened an asset claim window for creditor distributions

According to Reuters, BlockFi had earlier said that customers with interest-bearing accounts probably wouldn’t get their money back in full. 

At first, it was thought that these users could get back between 39.4% and 100% of the value of their account.

FTX sees it as a step toward paying off its debts and possibly making the bankruptcy process go more quickly. 

The agreement could give BlockFi important tools to help it restructure its finances and could also help its users get their money back faster.

The ultimate impact on both firms and their stakeholders is uncertain, though, because the settlement is dependent on FTX’s capacity to satisfy its own financial obligations and is awaiting court approval.

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