BlockFi Disputes FTX, Three Arrows Capital’s $5 Billion Recovery Claims


Bankrupt crypto lender BlockFi is facing legal challenges from FTX and Three Arrows Capital (3AC) in an attempt to collect billions of dollars exchanged between the companies prior to their demise last year. FTX is seeking to recover loan repayments and collateral, as well as the $90 million that BlockFi withdrew from and the $400 million that Alameda Research paid in interest.

However, BlockFi has argued that FTX’s investment was a “gamble” and that its creditors shouldn’t be held responsible. In a court filing made on Monday, the company stated that the doctrine of “unclean hands” should be applied in order to prevent future unfairness.

Three Arrows Capital has also claimed that BlockFi owes them more than $220 million. The ongoing dispute could have a substantial effect on how much is paid back to each creditor in the individual bankruptcy cases. BlockFi has expressed concerns that the legal battles may have a negative impact of up to $1 billion on the repayment of its clients.

Under bankruptcy law, businesses have the right to reverse transactions that favoured some creditors over others in the months leading to filing for Chapter 11. It remains to be seen if BlockFi’s efforts to block the claims by FTX and Three Arrows Capital will be successful or if the companies will be able to recoup the funds they are seeking.

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