The administrator overseeing BlockFi’s chapter wind-down and the US Division of Justice (DOJ) have reached a settlement to dismiss a $35 million crypto asset switch lawsuit involving the crypto lender.
The settlement was accepted by Decide Michael B. Kaplan of the US Chapter Courtroom for the District of New Jersey on Friday, in response to court docket filings.
The lawsuit, filed in Might 2023, sought to switch over $35 million in crypto property from BlockFi to the US authorities. The DOJ mentioned it had warrants to grab the funds from the BlockFi accounts of two Estonian residents in a legal fraud case unrelated to BlockFi’s chapter.
On the time, the DOJ argued that the US Chapter Courtroom for the District of New Jersey didn’t have the jurisdiction to stop BlockFi from transferring the property. The dispute arose throughout BlockFi’s chapter proceedings.
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Case dismissed with prejudice
Underneath the stipulation agreed upon by each events, the case was dismissed with prejudice, which means it can’t be refiled. Every occasion will bear its personal authorized charges and prices as a part of the settlement.
Mohsin Meghji, Plan Administrator for BlockFi’s wind-down estates, represented the crypto agency within the case. The Division of Justice was represented by senior trial counsel Seth B. Shapiro and his workforce from the Civil Division’s Industrial Litigation Department.
In Might final yr, BlockFi introduced plans to close down its internet platform whereas partnering with Coinbase to assist purchasers withdraw their remaining funds. Eligible customers, together with these with BlockFi Curiosity Accounts, retail loans, and personal consumer accounts, can use Coinbase for withdrawals.
The corporate declared chapter in November 2022 following the collapse of FTX and subsequently set a withdrawal deadline of April 28, 2024, for purchasers to reclaim their crypto holdings.
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BlockFi reaches settlement with FTX
In March final yr, BlockFi additionally reached an $875 million settlement with FTX and Alameda Analysis estates, resolving about $1 billion in claims. CEO Zac Prince testified that FTX founder Sam Bankman-Fried’s actions straight precipitated BlockFi’s chapter.
The chapter court docket accepted BlockFi’s Chapter 11 plan in September 2023 to repay over 10,000 collectors. BlockFi owes roughly $10 billion to greater than 100,000 collectors, together with main money owed to its prime three collectors and the bankrupt hedge fund Three Arrows Capital.
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