- BlockFi had around $355 million frozen on FTX when the exchange went bankrupt
- BlockFi's creditors endorsed a restructuring plan to recover the assets they lost to FTX
A US court judge ordered the end of an automatic suspension of proceedings between FTX and BlockFi, which are both bankrupt, CoinDesk reported. The two can start negotiating a claims settlement.
BlockFi lost over a billion dollars
Crypto lender BlockFi filed for bankruptcy in November 2022, in part due to FTX’s sudden collapse and its ripple effect that occurred around the same time. That resulted in the automatic suspension of proceedings. Allegedly, BlockFi had around $355 million frozen on FTX and Alameda Research, FTX’s research and development counterpart, owed it another $671 million.
BlockFi CEO Zac Prince testified against former FTX CEO Sam Bankman-Fried, who was ultimately found guilty on all charges. Prince explained that BlockFi had to declare bankruptcy because it had partnered with FTX and Alameda. The lender lost “a little over a billion dollars” as a result of this involvement.
Will the lender recover its assets?
The suspension was altered to let FTX debtors make defenses, arguments, setoffs, or counterclaims or take other measures related to BlockFi’s claims in the FTX bankruptcy proceedings, US court judge Michael Kaplan ordered on November 13.
After a trial that went on for over a month, Bankman-Fried was found guilty on seven counts of fraud. At the end of September, BlockFi’s creditors endorsed a bankruptcy restructuring plan that would make it possible to recover the assets they lost to FTX and crypto hedge fund Three Arrows Capital, which went under in the middle of last year.
FTX debtors transferred millions worth of SOL
In related news, wallets controlled by FTX debtors are moving millions of dollars worth of the Solana token SOL as its almost 150% monthly rally slows down.
According to data from blockchain analysis tool PeckShield, FTX-linked addresses have moved 250,000 SOL, worth more than $13.5 million when the token reached its peak value, to Binance and crypto trading company Wintermute. They also moved USDT worth $4 million to the same platforms.
The group of debtors is handling FTX’s bankruptcy. The transfers indicate plans to sell the tokens on the open market.
