Crypto Rollercoaster: FTX and BlockFi Proceed in Claims Settlement

Judge Allows FTX and BlockFi to Proceed with Claims Settlement

FTX and BlockFi claims settlement approved by judge.

Buckle up, digital asset investors! The rollercoaster ride continues as two bankrupt crypto companies, FTX and BlockFi, have been given the green light to negotiate their claims settlement. It’s like watching two heavyweight fighters step back into the ring for a final showdown!

In a dramatic twist, United States bankruptcy judge Michael Kaplan lifted the automatic holding on proceedings between FTX and BlockFi on November 13. Now, debtors from FTX can bring on their “arguments, defenses, counterclaims, setoffs, or otherwise” regarding the BlockFi claims in the FTX bankruptcy proceeding. It’s time to unleash their legal firepower and see who comes out on top!

You might be wondering how these companies ended up in Chapter 11 bankruptcy. Well, it all started with the implosion of FTX, leaving BlockFi with approximately $355 million frozen on the FTX platform and an additional $671 million owed by Alameda Research. Talk about being caught in the crossfire, poor BlockFi!

But don’t get too excited, FTX debtors. The court order made it clear that you won’t be receiving any affirmative distribution from the BlockFi Debtors. It’s like craving a delicious piece of cake, only to find out that it’s just a mirage. Both parties are now advised to file for mediation with the Delaware Bankruptcy court ASAP. Let the negotiation games begin!

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What’s the deadline for this mediation showdown, you ask? Well, the court insists that the clock is ticking, and mediation should start “no later” than December 24, 2023. Consider it their Christmas gift to the crypto community. Will it be a festive season for FTX and BlockFi, or will they have to settle for lumps of coal?

Speaking of FTX and BlockFi, their CEOs have been embroiled in a heated battle of their own. Zac Prince, the head honcho at BlockFi, testified against the former CEO of FTX, Sam Bankman-Fried, during his nail-biting five-week criminal trial. Unfortunately for Bankman-Fried, the jury found him guilty on all seven counts. Ouch!

Prince and his BlockFi team dropped some bombshell evidence on October 13. They argued that if FTX hadn’t spiraled into chaos, BlockFi wouldn’t have had to file for bankruptcy, even in the midst of the dreaded bear market. The company claims losses of “a little over a billion dollars.” That’s enough to make even the boldest investor break out in a cold sweat!

But don’t despair, BlockFi customers! The court granted the company permission in August to repay its loyal U.S.-based Wallet customers. Although withdrawals weren’t initially allowed, BlockFi came to the rescue in September, with creditors approving a bankruptcy restructuring plan. The court’s final stamp of approval came on September 26. Phew!

Now, here’s where BlockFi strikes back. On October 24, the company made an exciting announcement. They declared that they are starting to pay back some of their creditors, and withdrawals “are currently available to nearly all Wallet customers.” It’s like a financial Christmas miracle—your funds are no longer trapped in the icy grip of uncertainty.

So, dear readers, get ready for the epic battle between FTX and BlockFi. Will these crypto companies emerge triumphantly from their bankruptcy woes? Only time will tell. Grab some popcorn, keep a close eye on this rollercoaster ride, and remember to hold onto your digital assets tight!

Psst, don’t forget to share your opinions on this crypto showdown in the comments below. Will FTX and BlockFi come out stronger or surrender to the chaos? Let’s hear your thoughts!

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