According to the report, a settlement resolving claims and disputes between crypto lender BlockFi and defunct crypto hedge fund Three Arrows Capital (3AC) was approved on Monday by a United States judge, who ordered that the details remain sealed.
Judge approves BlockFi and 3AC settlement deal but details remain confidential https://t.co/UiTMmtVBBC
— The Block (@TheBlock__) February 7, 2024
In a New Jersey Bankruptcy Court hearing, Judge Michael Kaplan authorized the firms’ compromise to avoid additional legal fighting. BlockFi claimed 3AC owed it $129 million, while the hedge fund claimed BlockFi owed it $280 million.
Furthermore, Judge Kaplan declined to unseal the settlement agreement, adding that doing so would be “counter-intuitive.” He contested the United States. The Trustee opposed the seal, claiming that the debtors had not demonstrated a necessity for confidentiality in exposing the conditions.
Moreover, BlockFi’s motion to seal certain information argued that the terms are commercially sensitive. This could impact litigation against the bankrupt crypto exchange FTX. The court granted the motion to seal, citing the need to protect settlement strategies and respect comity with 3AC’s foreign bankruptcy proceedings.
BlockFi Settlement Approved, Creditors to Receive Distributions
Approval of the settlement allows BlockFi to move forward with distributions from the lending estate to creditors, a key reason it sought quick approval. In September 2023, Judge Kaplan approved BlockFi’s amended Chapter 11 bankruptcy and customer repayment plan, clearing the firm for liquidation.
Moreover, estimates then showed that BlockFi owed up to $10 billion to over 100,000 creditors. This included $1 billion to its three largest creditors and $220 million to 3AC. Three Arrows Capital fell in June ’22, and BlockFi went bankrupt in late November ’22 after FTX’s collapse.
Earlier in February, crypto bankruptcy claims platform OPNX, launched by 3AC co-founders Su Zhu and Kyle Davies, announced it would officially cease all operations and shut down by February 14.
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