FTX and Alameda settled their disputes with BlockFi, agreeing to pay up to $874 million to the company, subject to court approval.
Bankrupt cryptocurrency companies FTX and BlockFi have reportedly settled their disputes arising from their collapse in 2022 after the cryptocurrency exchange left several companies in a death spiral that left billions of dollars in limbo. According to the details of the agreement, FTX will pay BlockFi up to $874.5 million, pending approval by US Bankruptcy Judge John Dorsey in Wilmington, Delaware, Reuters reported.
Litigation between the two entities began in 2023, with both seeking to recover funds borrowed before their joint bankruptcy in November 2022. Under the newly reached settlement, FTX will pay $250 million to BlockFi, while the remaining amount is contingent on FTX's efforts to compensate. Its clients are in the midst of bankruptcy proceedings.
In addition, FTX also committed to pay an additional $185.3 million to BlockFi, representing the amount BlockFi held in its FTX trading accounts when the exchange collapsed. The payout ratio for BlockFi customers with interest-bearing accounts varies widely, with potential redemptions ranging between 39.4% and 100% of their account balances.
As part of the settlement, BlockFi agreed to drop a lawsuit related to 56 million Robinhood shares, which were allegedly pledged as collateral for loans to Alameda Research, FTX's main market maker. These stock shares were seized by the US Department of Justice following the arrest of FTX founder Sam Bankman-Fried, who now faces more than 100 years in prison after being convicted on multiple charges related to the collapse of his stock exchange.
