BlockFi’s Bankruptcy Plans Faces Stiff Opposition From FTX

There’s no respite for BlockFi as the bankrupt crypto lender struggles to pay its creditors and customers.

BlockFi has brought forward several proposals since sliding into bankruptcy last year owing to the market turmoil. However, FTX’s latest legal filing poses a hurdle for the now-defunct company as it accuses BlockFi of abusing the planning process.

• FTX said that the newly proposed plan attempts to avoid substantial claims against BlockFi.

“Yet the BlockFi Debtors believe some bankruptcy wand can be waived to make the FTX Debtors’ claims disappear incident to their recently amended liquidating chapter 11 plan dated June 28, 2023 (the “Liquidating Plan”),4 and that they can do so without satisfying basic procedural fairness and due process requirements. This is abuse of the plan process.”

• FTX also mentioned repayments and collateral with regards to a loan with its sister trading arm Alameda Research, in addition to $1 billion in collateral pledges made by Emergent Fidelity, a company established by former boss Sam Bankman-Fried to hold Robinhood shares.
• The filing also asserted that BlockFi may have claims against FTX which the latter’s lawyers are expected to object to.
• Besides FTX, Three Arrows Capital (3AC) has also opposed BlockFi’s bankruptcy plan and claims that the latter owes it more than $220 million.
• The Singapore-based crypto hedge fund had earlier argued that it wasn’t provided the opportunity to challenge fraud allegations. Its liquidators are seeking to recover $1.3 billion from the founders.