Bankrupt crypto lender BlockFi and collapsed crypto hedge fund Three Arrows Capital (3AC) have reached a settlement in court, but the details of the deal’s terms have been sealed.
In a hearing on Feb. 6 in a New Jersey Bankruptcy Court, Judge Michael Kaplan approved the settlement between the two firms. Initially, BlockFi claimed that 3AC owed the firm $129 million, while 3AC claimed that BlockFi owed the firm $280 million.
The dispute was centred around preferential payments, which are transactions made just before a bankruptcy that could have potentially given the recipient a larger sum than they would have received in court.
The resolution of the counterclaims between BlockFi and 3AC comes after the two parties were put into mediation by Judge Kaplan last October, and was likely the result of the two-day hearing that began on Jan. 5 to finally resolve the matter.
“It’s counterintuitive to require the disclosure of settlement details,” said the Judge, rebutting a request from the U.S. Trustee to unseal the details.
In its motion to seal the information, BlockFi said certain commercially sensitive parts of the agreement could potentially impact its future litigations. The firm’s final Chapter 11 reorganization plan was approved by the court last September and the firm said it was ready to begin paying back creditors in October.
BlockFi has opened withdrawals for customers with funds stuck in BlockFi Wallet accounts in batches, completing its first wave of distributions on January 22. The firm said it had returned over $500 million worth of crypto to 130,000 of its clients.
