Key takeaways:
- The US court accepted a settlement resolving claims and disputes between 3AC and BlockFi, but she ordered that the specifics be confidential.
- In light of the need to preserve settlement plans and show compliance with 3AC’s international bankruptcy case, the court allowed the motion to seal.
The United States court accepted a settlement resolving claims and disputes between the defunct crypto hedge fund Three Arrows Capital (3AC) and cryptocurrency lender BlockFi, but she ordered that the specifics be confidential.
Judge Michael Kaplan of the New Jersey Bankruptcy Court accepted a settlement between the two corporations on February 6 to avoid future legal disputes. BlockFi had claimed that 3AC owed it $129 million, while the hedge fund had maintained that BlockFi owed it $280 million.
Judge Kaplan dismissed the US Trustee’s appeal to the seal, arguing that the terms should be made public because the debtors had not shown evidence for the necessity of keeping the settlement secret. She went on to say that it would be “counter-intuitive” to unseal the settlement agreement.
The stipulations, according to BlockFi’s request to have some information sealed, are commercially sensitive and may have an effect on legal proceedings against the bankrupt cryptocurrency exchange FTX.
In light of the need to preserve settlement plans and show compliance with 3AC’s international bankruptcy case, the court allowed the motion to seal. One of the main reasons BlockFi requested rapid approval was so that it could proceed with distributions to creditors from the lending estate once the settlement was approved.
When BlockFi was allowed for liquidation in September 2023, Judge Kaplan approved the company’s updated Chapter 11 and customer payback plan.
Estimates suggested that BlockFi owed over 100,000 creditors as much as $10 billion. This includes $220 million to 3AC and $1 billion to its three biggest creditors.
Following the demise of FTX, BlockFi filed for bankruptcy in late November 2022, while Three Arrows Capital folded in June 2022.
Launched by 3AC co-founders Su Zhu and Kyle Davies, the cryptocurrency bankruptcy claims platform OPNX declared earlier this month that it would formally end all activities and shut down by February 14.
OPNX sent out an email to users advising them to settle their bets by February 7 and remove their cash from the platform by February 14. After this date, the ability to withdraw will be completely removed.
“We would like to inform you that OPNX.com will officially cease operations and shut down in February 2024.”
OPNX is a cryptocurrency exchange and hybrid bankruptcy claims platform that lets customers trade bankrupt cryptocurrency companies’ creditor claims.
