According to court filings from Friday, the firm’s ability to recover funds for its clients and creditors, affected by the bankruptcy of crypto lender BlockFi, will heavily rely on its claims against its commercial counterparties, namely FTX and Alameda.
BlockFi, in its wind-down plan submitted to the U.S. Bankruptcy Court for the District of New Jersey, emphasized the significant impact of litigation outcomes on the recovery of funds for clients.
The plan stated that the success or failure of these legal actions could result in a difference of over $1 billion for clients eagerly awaiting the return of their money.
Additionally, the plan outlined projected recoveries, which included approximately $1.06 billion from the liquidation of BlockFi Inc. Interest Account Claims, $216 million from BlockFi Lending LLC Private Client Account Claims, and $371 million from BlockFi International Ltd. Private Client and Interest Account Claims.
However, it cautioned that the actual recoveries received by clients might deviate significantly from these estimated figures.
In a tweet that echoed through the digital realms, BlockFi unveiled the key to its financial resurrection. With a confident flourish, the firm declared, “While a constellation of factors will influence recoveries, our sights are firmly set on two celestial bodies: Alameda and FTX.” These formidable entities, whose names reverberate through the crypto realm, held the key to BlockFi’s salvation.
As the numbers danced before the eyes of curious onlookers, the staggering figures came into focus. A celestial vault containing $355 million worth of crypto lay frozen on the enigmatic platform of FTX.
But that was not all, for a mighty loan of $671 million had been entrusted to Alameda Research, the trading arm of the same nebulous entity. It was a financial web of interconnectedness, entangling BlockFi in the intricate dance of chapter 11 wind-down proceedings in the hallowed halls of Delaware.
