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

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.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

The convergence of DePIN and energy generation aims to address modern grid challenges by incentivizing distributed generation.

article-image

Togo activist Farida Nabourema is fighting back with Bitcoin

article-image

Roshan Robert told Blockworks that OKX brought him on back in September to plan out its US expansion

article-image

Could we stop using BTC to amplify our short-term risks — and start using it to hedge our long-term ones?

article-image

Sol Strategies will be the tokenized stock platform’s first listing

article-image

Craig Fuller, CEO and founder of FreightWaves, breaks down how tariffs are and will impact shipping and inventories

article-image

This limited-edition run of sparkling water is more for existing traders than crypto newcomers, but mainstream distribution is part of the plan.