American Judge Lifts Automatic Suspension on FTX and BlockFi Settlement Negotiations
An American bankruptcy judge has recently allowed the resumption of negotiations between FTX and BlockFi, two bankrupt crypto companies, as part of their claims settlement.
This decision ends an automatic suspension that was weighing on these proceedings. This means that FTX debtors are allowed to resume their arguments and defenses regarding BlockFi’s claims, which, as a reminder, filed for bankruptcy in November 2022 following its collapse.
BlockFi has approximately $355 million frozen on the FTX platform, in addition to $671 million owed by Alameda Research. The crypto entity has therefore initiated several legal proceedings against FTX, in order to regain control of its funds and be able to repay its creditors.
A Progress Reboot for BlockFi
The decision also states that FTX debtors will not be entitled to receive an affirmative distribution from BlockFi debtors, meaning they cannot claim a share of the assets or repayments that BlockFi plans to distribute to its own creditors.
In addition, mediation must be filed with the Delaware District Bankruptcy Court, with a scheduled start no later than December 24, 2023.
On October 24, BlockFi announced on its blog that it would start repaying some of its creditors. This announcement also indicated that withdrawals were now available for “almost all customers,” signaling a gradual restart of its operations and an attempt to stabilize after a rather tumultuous period.
