FTX and BlockFi have received the approval to resume
proceedings for the negotiation of claims settlements in the aftermath of
BlockFi’s bankruptcy filing last November. This step allows FTX to present
counterclaims and arguments, paving the way for a potential between the two
bankrupt crypto firms.
BlockFi filed for bankruptcy in November 2022,
citing the repercussions of FTX’s sudden collapse as a significant factor.
However, after the court paused the proceedings, BlockFi was left with
approximately $355 million frozen on FTX’s platform and an additional $671
million owed by FTX’s sister company, Alameda Research, Coindesk reported.
US bankruptcy judge Michael Kaplan modified the
order on November 13, allowing FTX’s debtors to engage in discussions regarding
claims settlement . This permitted FTX to present defenses, counterclaims, and
setoffs concerning BlockFi’s claims in the ongoing bankruptcy proceedings.
Recently, in the case that found FTX’s Former CEO
guilty of fraud and money laundering charges, BlockFi’s CEO, Zac Prince,
testified during the trial. Prince testified against Bankman-Fried,
highlighting how BlockFi’s bankruptcy directly resulted from its association with
FTX and Alameda.
In September, BlockFi’s creditors approved a