According to court documents, the legal actions taken against the bankrupt crypto lender’s business partners are expected to have a significant impact, exceeding $1 billion, on the creditors.
Based on court documents, the legal actions pursued against the bankrupt crypto lender’s business partners are anticipated to greatly benefit the creditors, surpassing $1 billion in impact.
In its plan to wind down operations submitted to the U.S. Bankruptcy Court for the District of New Jersey, BlockFi stated that the outcome of the litigation supporting these claims will have a significant impact, exceeding $1 billion, on clients who are awaiting the return of their funds.
The plan also outlined the expected recoveries, which include approximately $1.06 billion from the liquidation of BlockFi Inc. Interest Account Claims, $216 million from BlockFi Lending LLC Private Client Account Claims, and $371 million from BlockFi International Ltd. Private Client and Interest Account Claims. However, it is important to note that the actual recoveries received by clients may differ significantly from these projected figures.
In a tweet on Friday, the firm stated, “Our claims against Alameda and FTX are the main reasons behind the higher recoveries.” This means that these claims play a significant role in achieving higher amounts of recovered funds.
BlockFi has approximately $355 million worth of cryptocurrency held in a frozen state on FTX, and an additional $671 million provided as a loan to Alameda Research, the trading arm of FTX. Both FTX and Alameda Research are undergoing chapter 11 wind-down proceedings in Delaware.
Recently, Judge Michael Kaplan, a New Jersey Bankruptcy Judge, made a ruling stating that nearly $300 million in funds owed to BlockFi custodial wallet users can be returned. In a tweet, the firm mentioned that the filed liquidation plan on Friday ensures the full return of non-estate digital assets held in client wallet accounts under the Wallet Program, while taking into account any relevant set-offs.
There will be a hearing on the plan scheduled for June 20th.
This information is for general knowledge only and should not be considered as advice for investing or making financial decisions.
