BlockFi, the beleaguered cryptocurrency lender, is pushing back against FTX and Three Arrows Capital (3AC). FTX and 3AC, facing bankruptcy themselves, strive to recover vast sums to satisfy their creditors. However, BlockFi’s recent court declaration paints a different picture.
On Monday, BlockFi asserted its stance as a victim of the FTX platform. They argue that FTX needs more authority to reclaim over $5 billion. Moreover, BlockFi alleges that the now-defunct crypto hedge firm, 3AC, deceived its lenders to secure funds. These claims have ignited a legal battle that could influence the payouts to creditors of all three firms.
The ongoing lawsuit against FTX, 3AC, and other crypto entities could jeopardize $1 billion in client refunds. This is according to BlockFi’s statements. Last month, BlockFi’s creditors settled. They had previously accused the firm’s management of ignoring red flags before lending to FTX. Consequently, an agreement on a repayment plan was established.
However, the path to resolution could be smoother. These three embattled crypto companies are currently navigating intricate financial deals. Their primary goal? To ensure both creditors and consumers receive due compensation.
Significantly, FTX, another struggling crypto enterprise, has voiced its objections. They challenge BlockFi’s bankruptcy blueprint, claiming it breaches bankruptcy regulations. The contention lies in BlockFi’s decision to contest transactions amounting to over $1 billion. Additionally, 3AC, indebted to $220 million to the company, has raised concerns. They argue that they weren’t given a fair chance to counter the allegations of fraud.
The crypto landscape is witnessing a high-stakes legal drama. The outcome remains uncertain as BlockFi, FTX, and 3AC grapple with financial woes. Creditors, clients, and the broader crypto community await the verdict with bated breath. The resolution of this dispute will undoubtedly shape the future dynamics of the cryptocurrency lending space.
Source: https://www.cryptopolitan.com/ftx-and-3acs-bankruptcy-claims-contested-by-blockfi-in-ongoing-legal-drama/