FTX, Three Arrows, and SEC Join Forces Against BlockFi's Bankruptcy Plans, Unveiling Billion-Dollar Dispute
FTX, Three Arrows Capital (3AC), and the Securities and Exchange Commission (SEC) have united against BlockFi's bankruptcy plans, revealing a billion-dollar dispute that has brought them together.
In a legal filing submitted by FTX on June 7, it has been argued that BlockFi's proposed plans exploit bankruptcy regulations.
The filing, titled "Objection of the FTX Debtors to BlockFi Debtors' Motion for Approval of Disclosure Statement, Solicitation Procedures and Forms, and Confirmation Schedule," underscores the critical matter at hand, involving disputed transactions valued at over one billion dollars.
On June 28, 2023, BlockFi submitted two significant documents to the court: the Disclosure Statement and the Second Amended Joint Chapter 11 Plan.
The Plan includes provisions known as "Third Party Releases," which offer legal protections to specific individuals and entities involved in the bankruptcy process.
These Releases aim to address a wide range of legal claims, causes of action, and other obligations that may arise during the bankruptcy proceedings and to ensure the provision of any further relief deemed fair and appropriate.
FTX strongly opposes the Disclosure Statement and the proposed Plan, asserting that they unfairly diminish its significant claims against BlockFi.
FTX highlights substantial repayment and collateral amounts tied to a loan involving its trading arm, Alameda Research, totaling hundreds of millions of dollars.
Furthermore, FTX points out $1 billion in collateral pledges made by Emergent Fidelity, a company established by FTX's CEO, Sam Bankman-Fried, to hold shares in Robinhood.
In addition to FTX, Three Arrows Capital (3AC) also joined the opposition against BlockFi's plans.
As one of BlockFi's most
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