BlockFi has reached a settlement with FTX and Alameda Research that will allow the company to return $874.5 million to clients affected by the bankruptcy.
The US Bankruptcy Court ruled that BlockFi will receive $185.2 million in refunds from FTX and $689.3 million from claims against Alameda Research. FTX has also committed to prioritizing BlockFi's $250 million payment, according to Cryptonews.
The decision was a significant step toward resolving FTX's bankruptcy issues. It was passed to facilitate the refund and distribution of funds to BlockFi's clients.
The resolution states, "This resolution allows BlockFi to comply with FTX's plan of reorganization and will help complete the process of repaying creditors."
BlockFi and FTX's creditors previously agreed that FTX would waive nearly all claims for preferential refunds.
The Court believes that the accepted agreement will benefit BlockFi's clients by guaranteeing full recovery of certain claims. "This agreement represents an excellent result," the document states.
With this settlement, clients will be able to receive the full amount of their claims, provided FTX can adhere to the accepted payment plan. FTX's refund efforts have made significant progress recently. For example, the company approved the sale of its stake in the Anthropic artificial intelligence project.
Compared to unsecured claims, the secured interest on the Alameda loan has accelerated repayment. The recognition of BlockFi's security interest gives it the right to pay that amount before unsecured claims are set off. As a result, payments to clients will be accelerated, and the risks of executing the FTX plan will be reduced.
The collaboration between the companies has not only reduced litigation costs but also ensured that funds set aside for FTX litigation will be used to pay creditors.
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