FTX opposes BlockFi’s bankruptcy plan

FTX filed an objection to BlockFi’s bankruptcy plan Wednesday

article-image

mundissima/Shutterstock modified by Blockworks

share

FTX objected to BlockFi’s bankruptcy plan Wednesday, claiming it “still suffers from certain fundamental shortcomings.”

FTX’s attorneys believe that “the Plan unfairly discriminates against the FTX Claims in certain respects” and have asked the Court to deny the plan. 

The opposition comes after BlockFi claimed it fell victim to FTX’s former CEO Sam Bankman-Fried actions. FTX is accused of misappropriating and commingling customer funds with Alameda Trading, its sister firm, in a scheme to defraud investors.

FTX is attempting to recover both loan repayments and collateral from the bankrupt crypto lender.

“The FTX Debtors do not seek to impede the BlockFi Debtors’ efforts to return value to their creditors, but, in the absence of a consensual resolution, must ensure any plan is fair to the FTX Debtors’ creditors, who are the beneficiaries of the FTX Claims,” the Wednesday filing said.

FTX argued in the Wednesday filing that the debtors for both BlockFi and FTX had attempted to work “constructively” to reach a proposal “to fairly and efficiently resolve the complex issues between the parties” due to the “dueling debtor” claims. 

A July report from BlockFi’s committee of unsecured creditors found that BlockFi was aware of the risks associated with lending to Alameda. 

“BlockFi’s reliance on Alameda/FTX led to foreseeable (actually foreseen) losses of a staggering quantum,” the report stated. FTX and Alameda defaulted on around $680 million in collateralized loan obligations.

Furthermore, BlockFi’s credit risk team allegedly drafted a memo warning that Alameda “had unaudited financials” and “was offering volatile collateral.”

However, in an August filing, BlockFi argued that FTX and Alameda’s “scheme included fraudulently inducing BlockFi to loan over $1 billion worth of digital assets deposited on the BlockFi platform to Alameda Research.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates (10).png

Research

Kamino has evolved into a full-stack asset scaling suite with V2: unlocking new markets, improving capital efficiency, and catering to various risk profiles. We believe it is best positioned to become the credit backbone of Solana as the ecosystem matures. Simply put, KMNO remains our highest-conviction bet in the Solana ecosystem. This report lays out our thesis.

article-image

Greenwood was a success story before it was a tragedy

article-image

All eight included staking in their most recent SEC filings

article-image

With an updated Summary of Economic Projections, the Fed sees growth slowing and inflation increasing

article-image

Where do crypto mobile games go from here?

article-image

Bybit’s Byreal, Binance Alpha and Coinbase’s DEX integrations

article-image

This isn’t the worst hack to ever hit Mt. Gox, but it could be the most entertaining