A United States judge has approved a settlement resolving disputes between crypto lender BlockFi and defunct crypto hedge fund Three Arrows Capital (3AC), with the details ordered to remain sealed.
New Jersey Bankruptcy Court Judge Michael Kaplan greenlit the agreement during a Feb. 6 hearing, aiming to halt further legal battles.
BlockFi asserted that 3AC owed it $129 million, whereas the hedge fund contended BlockFi owed it $280 million.
Judge Kaplan opted to keep the settlement agreement sealed, countering objections from the U.S. Trustee who argued for disclosure, citing the debtors’ failure to justify sealing.
BlockFi’s motion to seal specific information emphasized the sensitivity of the terms and their potential impact on litigation involving bankrupt crypto exchange FTX.
The court upheld the motion, emphasizing the need to safeguard settlement strategies and honor comity with 3AC’s foreign bankruptcy proceedings.
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Approval of the settlement enables BlockFi to proceed with distributions from the lending estate to creditors, a critical step sought for rapid approval.
Kaplan had previously greenlit BlockFi’s amended Chapter 11 and customer repayment plan in September 2023, following the firm’s clearance for liquidation.
Estimates indicated BlockFi’s debts amounted to $10 billion among over 100,000 creditors, with its three largest creditors owed $1 billion and 3AC owed $220 million.
Three Arrows Capital’s collapse in June 2022 led to BlockFi’s bankruptcy filing in late November 2022, following the downfall of FTX.
Additionally, in February, OPNX, a crypto bankruptcy claims platform launched by 3AC co-founders Su Zhu and Kyle Davies, announced its official closure, ceasing operations by Feb. 14.
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