March 28, 2024

BlockFi: FTX and Alameda Research owe the company $1 billion

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BlockFi: FTX and Alameda Research owe the company $1 billion

BlockFi's lawyer said that the FTX cryptocurrency exchange has more than 1 million creditors, but the company does not havethe funds it needs to cover all debts.

The first bankruptcy hearing of cryptocurrency lender BlockFi took place, in which the firm revealed that FTX and Alameda Research owed it more than $1 billion: $671 million for an overdue loanAlameda and $355 million in the form of assets frozen on the crypto exchange.

At the hearing, Joshua Sussberg, a partner at the law firm Kirkland & Ellis, said that the events that led to the current situation began with the collapse of Terra/Luna.Next in the chain: Celsius Network, Core Scientific, Three Arrows Capital, Voyager, and FTX – defaultor insolvency. BlockFi is trying to prove that FTX is incapable of handling its debt obligations.

Sussberg compared the corporate structure of FTX and BlockFi, saying that FTX could have been created for a specific purpose — the company has 130 businesses that are unclear why they are registered.However, the BlockFi structures that transact with each other are created for a specific purpose and are includedinto the company's overall infrastructure.

BlockFi now claims to have over 100000 creditors and about $257 million, which the company managed to obtain by liquidating its crypto assets. Previously, BlockFi sued former FTX CEO Sam Bankman-Fried to recover $648 million worth of Robinhood shares.