BlockFi Stops FTX And 3AC Trying To Recover Billions Before Companies Fall
- BlockFi is fighting to get rid of debts with other bankrupt crypto firms, FTX and Three Arrows Capital (3AC).
- The lending platform argued that they were also victims of the collapse of these companies so there was no need to repay.
- The filings are an attempt to unravel complex financial transactions between crypto companies that are currently going through separate bankruptcies as they attempt to repay customers and other creditors.
According to Bloomberg, bankrupt crypto lender BlockFi Inc. hopes to stop FTX and Three Arrows Capital (3AC) from trying to recover billions of dollars in transactions between the companies before the three companies broke up last year.
BlockFi said in a court filing on Monday that it was a victim of the FTX platform, so FTX was not entitled to the recovery of more than $5 billion. Similarly, BlockFi accused collapsed crypto hedge fund 3AC of using fraud to borrow money from lenders and without potential repayment.
Monday’s filing spurs an ongoing court battle that could affect how much creditors of BlockFi, FTX and Three Arrows Capital are paid in their respective bankruptcy proceedings.
BlockFi says the lawsuit against FTX, 3AC, and several other crypto companies could affect $1 billion in customer refunds. BlockFi’s creditors, who have previously accused management of ignoring warning signs before lending to FTX, settled with the company last month, moving forward with a repayment plan.
These three defunct crypto companies are all currently trying to work out complicated financial relationships as they seek to repay creditors and customers.
After BlockFi launched its bankruptcy plan, collapsed crypto firm FTX protested, claiming that the platform abused bankruptcy rules, with more than a billion dollars in contested transactions. is under threat. In addition, 3AC, a creditor of more than $220 million, also objected that it had no chance to contest the fraud allegations.
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