US Judge Approves Sealed Settlement Between BlockFi and 3AC

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By BitcoinWiki News

Key Takeaways:

– U.S. judge approves sealed settlement between BlockFi and Three Arrows Capital (3AC)
– Details of the settlement remain undisclosed
– Settlement aims to end legal battles between the two companies
– BlockFi claimed 3AC owed them $129 million, while 3AC argued BlockFi owed them $280 million
– Sealed settlement is approved despite objections raised by U.S. Trustee
– Judge defends the decision to keep details sealed
– BlockFi granted motion to seal certain information
– Settlement allows BlockFi to proceed with distribution of assets to creditors
– BlockFi previously filed for bankruptcy in November 2022
– Three Arrows Capital collapsed in June 2022
– 3AC co-founder Su Zhu arrested in Singapore after fund’s collapse
– Zhu and business partner Kyle Davies sentenced to four months in prison for contempt of court
– Both Zhu and Davies remain on the run from the firm’s liquidators and authorities
– Monetary Authority of Singapore prohibits both Zhu and Davies from floating regulated investments for nine years


Title: Judge Approves Sealed Settlement Between BlockFi and 3AC

Section 1: Sealed Settlement Approved by Judge
A United States judge has approved a sealed settlement that resolves the claims and disputes between crypto lender BlockFi and defunct crypto hedge fund Three Arrows Capital (3AC). The details of the settlement remain undisclosed, but Judge Michael Kaplan approved the settlement during a hearing on February 6th in the New Jersey Bankruptcy Court.

Section 2: Legal Battles and Settlement Details
The settlement aims to put an end to the ongoing legal battles between BlockFi and 3AC. BlockFi had claimed that 3AC owed them $129 million, while the hedge fund argued that BlockFi owed them $280 million. The details of the settlement remain sealed, and the judge defended the decision, stating that unsealing the details would be counter-intuitive. The U.S. Trustee’s objection for the disclosure of the terms was also rejected.

Section 3: Approval and Distribution of Assets
With the settlement now approved, BlockFi can proceed with the distribution of assets from the lending estate to its creditors, a crucial step that prompted the company to seek swift approval. Judge Kaplan had previously approved BlockFi’s amended Chapter 11 and customer repayment plan in September 2023 when the company received clearance for liquidation. At that time, it was estimated that BlockFi owed over $10 billion to more than 100,000 creditors, including $1 billion to its three largest creditors and $220 million to 3AC.

Section 4: Three Arrows Capital Developments
Three Arrows Capital collapsed in June 2022, and in October last year, co-founder Su Zhu was arrested in Singapore while attempting to flee. Both Zhu and his business partner, Kyle Davies, were issued committal orders for contempt of court and were sentenced to four months in prison. The former Three Arrow executives were issued subpoenas to cooperate with the investigations and activities of Teneo in unraveling issues that led to the implosion of the fund. Both individuals remain on the run from the firm’s liquidators and authorities and were prohibited by the Monetary Authority of Singapore from floating regulated investments for nine years.

Section 5: Conclusion
The approval of the sealed settlement between BlockFi and 3AC has brought an end to the legal disputes between the two entities. With the details of the settlement remaining undisclosed, the focus now shifts to the distribution of assets and the ongoing developments related to Three Arrows Capital and its former executives.

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