- BlockFi, a crypto lending firm that declared bankruptcy in 2022 post the FTX collapse, has revealed the successful sale of its FTX claims.
- This move signifies a pivotal stride towards finalizing BlockFi’s bankruptcy proceedings and disbursing funds to creditors.
- The sale reportedly concluded at a premium over the face value, promising a full distribution to all validated customers and unsecured creditors.
BlockFi’s successful sale of FTX claims ensures imminent fund distribution to creditors, marking significant bankruptcy progress.
BlockFi Sells FTX Claims at Premium: A Positive Shift for Creditors
The crypto lending company, BlockFi, announced that it has sold its claims against FTX at a considerable premium. This move is pivotal as it allows for a near-term finale in distribution to creditors, signifying a crucial step towards wrapping up its bankruptcy case.
Administrator’s Perspective: Optimistic Outlook for Customers
Mohsin Y. Meghji, BlockFi’s plan administrator, confirmed through a report filed with the United States Bankruptcy Court that the transaction had monetized all claims against FTX. Meghji highlighted that this outcome surpasses the initial expectations set during the bankruptcy filing in November 2022. This transaction, executed under stringent efforts, is perceived to offer the best possible resolution for BlockFi’s customers.
FTX Settlement and Final Customer Distribution
In March 2024, BlockFi reached a settlement with FTX and Alameda Research, obtaining $874.5 million in claims against them. This settlement was pivotal, laying the foundation for future distributions to BlockFi’s customers based on anticipated payouts from FTX. The option given to monetize these FTX claims through a third-party sale was another strategic decision aimed at maximizing returns.
Progress in Repayment: Active Efforts and Strategic Decisions
In June 2024, the plan administrator initiated the sale process of the FTX claims, aiming to secure maximum returns for BlockFi’s customers and creditors. This process concluded swiftly by July 2024, with bids surpassing the face value of the claims, ensuring substantial financial recovery for BlockFi and its creditors.
BlockFi’s platform remains inactive, with repayments being managed through a collaboration with Coinbase. Some users have confirmed receiving notifications from Coinbase acknowledging the synchronization of their details with BlockFi’s data, indicating progress in the distribution process.
Conclusion
BlockFi’s successful sale of its FTX claims marks a significant milestone in its bankruptcy proceedings, promising near-term distribution to creditors. Despite lingering skepticism from some customers, the administrative and strategic measures undertaken are proving effective. This development not only underscores BlockFi’s commitment to resolving its financial obligations but also sets a precedent for the structured wind-up of crypto entities facing similar predicaments.
