BlockFi, a bankrupt cryptocurrency lender, is attempting to block FTX and Three Arrows Capital (3AC) from retrieving hundreds of millions of dollars to pay back their creditors. BlockFi claims that FTX misappropriated $5 billion of the loan it provided and that BlockFi’s creditors should not be pushed to the back of the line. FTX also provided $400 million to BlockFi in June 2022, but BlockFi claims it was not a standard loan agreement. Estimates show BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to 3AC. BlockFi claims 3AC committed fraud with the money it borrowed and argued it also shouldn’t be entitled to a potential repayment. BlockFi creditors previously accused the firm of overlooking several red flags before transacting with FTX and its trading firm Alameda Research in the months prior to FTX’s collapse in November 2022. Despite this, creditors settled with BlockFi last month to move forward with a repayment plan. BlockFi filed for Chapter 11 bankruptcy on Nov. 28, about two weeks after FTX similarly filed for bankruptcy. BlockFi is attempting to block FTX and 3AC from retrieving hundreds of millions of dollars to pay back their creditors, claiming that FTX misappropriated $5 billion of the loan it provided. FTX provided $400 million to BlockFi in June 2022, but BlockFi claims it was not a standard loan agreement. BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to 3AC. BlockFi claims 3AC committed fraud with the money it borrowed and argued it also shouldn’t be entitled to a potential repayment. BlockFi creditors accused the firm of overlooking several red flags before transacting with FTX and its trading firm Alameda Research in the months prior to FTX’s collapse in November 2022. Despite this, creditors settled with BlockFi last month to move forward with a repayment plan. BlockFi and FTX both filed for Chapter 11 bankruptcy in November.
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 9 |
| People | FTX, Three Arrows Capital, BlockFi, Alameda Research, Deposit Risk |
| Currencies | None |
| Securities | None |
