FTX and Alameda have reached a settlement with BlockFi. The agreement stipulates an up to $874 million payment to BlockFi, pending court approval. This resolution comes after both FTX and BlockFi declared bankruptcy in November 2022, following a tumultuous period that adversely affected numerous companies and left billions of dollars in uncertainty.
The settlement arises from disputes linked to the financial collapses of FTX and BlockFi in 2022. The agreement, awaiting the nod from U.S. Bankruptcy Judge John Dorsey, entails a $250 million payment to BlockFi by FTX. The additional funds, amounting to a contingent sum based on FTX’s ability to pay back its customers, could bring the total to $874.5 million.
Settlement Brings Closure
Furthermore, FTX has agreed to compensate BlockFi with an extra $185.3 million. This represents the funds BlockFi had in its FTX trading accounts at the time of the exchange’s downfall. The outcome for BlockFi’s interest-bearing account holders appears promising, with recovery rates potentially spanning from 39.4% to 100% of their account balances.
As part of the agreement, BlockFi will withdraw its lawsuit over 56 million Robinhood shares once promised as collateral by Alameda Research, FTX’s primary trading arm. These shares became a point of contention after the U.S. Department of Justice seized them following Sam Bankman-Fried’s arrest. Bankman-Fried, FTX’s founder, faces a lengthy prison sentence exceeding 100 years for multiple charges related to his exchange’s collapse.