BlockFi and the US Department of Justice have reached a settlement to dismiss a lawsuit related to a high-stakes crypto asset transfer worth $35 million. This agreement has been approved by the court.
Case Overview
In May 2023, the US DOJ filed a lawsuit seeking to transfer over $35 million in crypto assets from BlockFi to the government. This was related to a criminal case involving two Estonian citizens and unrelated to BlockFi's bankruptcy. The DOJ argued that the Bankruptcy Court lacked jurisdiction to prevent the transfer of assets.
Settlement Terms
Under the terms of the stipulation, the case was dismissed with prejudice, meaning it cannot be refiled. Each party will bear its own legal fees. BlockFi was represented by Mohsin Meghji, while the DOJ was represented by senior trial counsel Seth B. Shapiro and his team.
Context and Implications for BlockFi
BlockFi announced plans to shut down its platform in May 2022, marking the beginning of its bankruptcy process linked to the collapse of FTX. In September 2023, the court approved BlockFi's rehabilitation plan aimed at helping over 10,000 creditors, indicating a significant debt exceeding $10 billion.
The settlement between BlockFi and the DOJ resolves the lawsuit and allows the company to continue its rehabilitation efforts while addressing pressure from outstanding debts.
