FTX, Alameda has reached a settlement with cryptocurrency lender BlockFi where it will pay up to $874 million.
FTX and Alameda have resolved their dispute with BlockFi, agreeing to pay BlockFi up to $874 million, subject to court approval.
Bankrupt cryptocurrency companies FTX and BlockFi have reportedly settled a dispute arising from their 2022 collapse after the cryptocurrency exchange sent many companies into a death spiral that left them in a multibillion-dollar recession. According to contract details, FTX will pay BlockFi up to $874.5 million, pending approval from U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, Reuters reported.
Litigation between the two entities began in 2023, with both seeking to recover funds they had lent before their joint bankruptcy in November 2022. Under the newly negotiated settlement, FTX will pay BlockFi $250 million, with the remaining amount contingent on FTX’s efforts. Repay customers during bankruptcy proceedings.
FTX also committed to pay BlockFi an additional $185.3 million. This corresponds to the amount BlockFi had in its FTX trading account when the exchange collapsed. Distribution rates for BlockFi customers with interest-bearing accounts vary significantly, with potential payback rates ranging from 39.4% to 100% of the account balance.
As part of the settlement, BlockFi agreed to drop its lawsuit over 56 million shares of Robinhood stock that were allegedly pledged as collateral for a loan to FTX’s primary market maker, Alameda Research. The shares were seized by the U.S. Department of Justice following the arrest of FTX founder Sam Bankman-Fried, who is currently serving more than 100 years in prison after being found guilty on multiple charges related to the exchange collapse.