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FTX and BlockFi have reached a settlement to resolve their disputes stemming from their bankruptcies in 2022. The agreement, subject to court approval, will see FTX pay BlockFi up to $874 million.
The litigation between the two companies began in 2023 as they sought to recover funds lent before their joint bankruptcies. According to the settlement terms, FTX will make a $250 million payment to BlockFi, with the remaining amount dependent on FTX’s efforts to reimburse customers during the bankruptcy proceedings.
Furthermore, FTX has committed to paying an additional $185.3 million to BlockFi, representing the funds held by BlockFi in its FTX trading accounts at the time of the collapse. The distribution percentage for BlockFi’s customers with interest-bearing accounts varies, with potential recoveries ranging from 39.4% to 100% of their account balances.
As part of the settlement, BlockFi has agreed to drop its lawsuit related to 56 million Robinhood shares allegedly pledged as collateral for loans to Alameda Research, FTX’s main market maker. These shares were seized by the U.S. Department of Justice following the arrest of FTX founder Sam Bankman-Fried, who is facing multiple charges in connection with the collapse of the exchange.
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