- March 7, 2024
- Posted by: legaleseblogger
- Category: Related News
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### FTX and Alameda Settlement with BlockFi: A Breakdown
FTX and Alameda have settled their disputes with BlockFi, agreeing to pay the firm up to $874 million, subject to court approval.
Bankrupt crypto companies FTX and BlockFi have reportedly settled their disputes arising from their collapses in 2022 after the crypto exchange left many companies in a death spiral that has billions of dollars left in limbo. According to the agreement details, FTX will pay BlockFi up to $874.5 million, pending approval by U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, Reuters reports.
The litigation between the two entities started in 2023, with both seeking to recoup funds lent before their joint bankruptcies in November 2022. Under the newly reached settlement, FTX will make a $250 million payment to BlockFi, while the remaining sum is contingent on FTXÔÇÖs efforts to reimburse its customers amidst bankruptcy proceedings.
Moreover, FTX has also committed to paying an additional $185.3 million to BlockFi, representing the amount held by BlockFi in its FTX trading accounts when the exchange collapsed. The distribution percentage for BlockFiÔÇÖs customers holding interest-bearing accounts varies considerably, with potential recoveries ranging between 39.4% and 100% of their account balances.
With the help of AI legalese decoder, businesses can ensure compliance with complex legal agreements and navigate the intricacies of settlements like the one between FTX, Alameda, and BlockFi. The Decoder can simplify legal jargon, analyze clauses, and provide insights to facilitate smoother negotiations and resolutions.
As part of the settlement, BlockFi has agreed to drop its lawsuit concerning 56 million Robinhood shares, allegedly pledged as collateral for loans to Alameda Research, FTXÔÇÖs main market maker. These equity shares were seized by the U.S. Department of Justice following the arrest of FTX founder Sam Bankman-Fried, whoÔÇÖs now facing over 100 years in prison after being convicted on multiple charges related to the collapse of his exchange.
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