The bankruptcy court said that FTX and Alameda owe BlockFi $1 billion, but it’s not that easy to figure out.
A lawyer for BlockFi said on the first day of its bankruptcy hearing that the crypto lender has $355 million stuck on FTX and that the collapsed exchange’s sister company, Alameda Research, has not paid back a $680 million loan.
BlockFi filed 15 motions on November 28. The court approved all of them at the first day’s hearing on November 29. This included removing the personal information of its 50 largest creditors and naming Kroll Restructuring Administration as its claims and noticing agent. This is the same company that FTX chose for its Chapter 11 bankruptcy case.
Related: The crypto exchange FTX will start paying salaries again.
In an email to worried customers, BlockFi said that the approved motions allow it to keep doing “core operations” and pay its employees and independent contractors during the restructuring process. BlockFi thinks that its monthly wage bill is about $5.8 million, and when it filed the motion on November 28, it owed about $1.5 million in wages.
The message to clients said that “maximizing value for all clients and other stakeholders” is BlockFi’s “single focus” during the proceedings.
CNBC reported on November 29 that BlockFi’s lawyer, Joshua Sussberg, said in the hearing that the company plans to reopen customer withdrawals at an unspecified time, and he was optimistic that the company will be able to save itself after the restructuring.
Even though FTX and Alameda owe BlockFi about $1 billion, FTX US gave BlockFi a $400 million line of credit on July 1. This makes it harder to figure out who owes how much money to whom.
According to BlockFi, which blamed its problems on the collapse of FTX, it still owes $275 million to FTX US as part of a deal that 89% of its shareholders agreed to.
The money was given to BlockFi after it got caught up in the ripple effect of Terra’s stablecoin going down on May 10. BlockFi said that the loan will end on June 30, 2027, and that it will cost 5% in interest.
Related: BlockFi, a cryptocurrency lender, has filed for bankruptcy and blames FTX exposure.
Also on November 28, BlockFi sued Emergent Fidelity Technologies, a holding company owned by Bankman Fried, for collateral that Emergent had promised to pay on November 9. The collateral shares in the online brokerage Robinhood. The next hearing will be on January 9.
