{"id":340401,"date":"2023-07-06T12:40:59","date_gmt":"2023-07-06T11:40:59","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=340401"},"modified":"2023-07-06T12:31:29","modified_gmt":"2023-07-06T11:31:29","slug":"sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans\/","title":{"rendered":"SEC, FTX, and Three Arrows Capital contest BlockFi&#8217;s bankruptcy plans"},"content":{"rendered":"<p>The U.S. Securities and Exchange Commission (SEC), alongside bankrupt crypto firms <a href=\"https:\/\/cryptoslate.com\/companies\/ftx\/\">FTX<\/a> and hedge fund\u00a0Three Arrows Capital (<a href=\"https:\/\/cryptoslate.com\/companies\/three-arrows-capital\/\">3AC<\/a>), have objected to <a href=\"https:\/\/cryptoslate.com\/companies\/blockfi\/\">BlockFi's<\/a> bankruptcy plans, according to July 5 court filings.<\/p>\n<h2>SEC opposes BlockFi's plans<\/h2>\n<p>In its <a href=\"https:\/\/restructuring.ra.kroll.com\/blockfi\/Home-DownloadPDF?id1=MTU1MTM1Ng==&id2=-1\">filing<\/a>, the SEC argued that the clauses in BlockFi's proposed plans were ambiguous and broad, as they did not provide adequate information that would aid other stakeholders.<\/p>\n<p>Consequently, the regulator has requested the court to suspend BlockFi's plan until the firm resolves the concerns raised.<\/p>\n<p>It wrote:<\/p>\n<blockquote><p>&#8220;The Debtors need to provide more detailed information about such broad releases to permit affected stakeholders to make an informed decision with respect to the Plan.&#8221;<\/p><\/blockquote>\n<p>Meanwhile, the financial regulator further noted that it <a href=\"https:\/\/cryptoslate.com\/sec-delays-collection-of-30-2m-fine-from-blockfi-to-prioritize-user-repayment\/\">holds<\/a> a $30 million claim against the bankrupt crypto firm. Last year, BlockFi <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2022-26#:~:text=SEC.gov,of%20its%20Crypto%20Lending%20Product\">agreed to pay<\/a>\u00a0a fine of $50 million to the SEC for failing to register its lending product. At the time, the lender also agreed to pay another $50 million in fines to settle similar charges in 32 states.<\/p>\n<h2>FTX highlights the &#8216;multifaceted' relationship<\/h2>\n<p>For <a href=\"https:\/\/restructuring.ra.kroll.com\/blockfi\/Home-DownloadPDF?id1=MTU1MTY5Mw==&id2=-1\">FTX<\/a>, the bankrupt exchange stated that while its relationship with BlockFi is &#8220;multifaceted,&#8221; the lender's proposal is an &#8220;abuse of the plan process.&#8221;<\/p>\n<p>In 2022, FTX <a href=\"https:\/\/cryptoslate.com\/blockfi-gets-250-million-credit-facility-from-ftx-to-support-platform\/\">extended<\/a> a $250 million revolving credit facility to BlockFi, a matter which has now become a legal issue amidst both firms' bankruptcy proceedings. Beyond that, FTX further highlighted several hundreds of millions of dollars in collateral and payments made by Alameda to BlockFi.<\/p>\n<p>FTX wrote that any attempt by BlockFi to recharacterize or subordinate these claims would be objected to, adding that &#8220;the BlockFi Debtors are pointing fingers at everyone but their prepetition leadership, for whom they now seek releases for prepetition actions and omissions in the Liquidating Plan.&#8221;<\/p>\n<h2>3AC's objection<\/h2>\n<p>In its filing, <a href=\"https:\/\/restructuring.ra.kroll.com\/blockfi\/Home-DownloadPDF?id1=MTU1MTU5NQ==&id2=-1\">3AC<\/a> argued that any attempt to subordinate its claims against BlockFi would violate the automatic stay as it has its <a href=\"https:\/\/cryptoslate.com\/the-downfall-of-three-arrows-capital-3ac-what-went-wrong\/\">bankruptcy case<\/a> before a U.S. court.<\/p>\n<p>The hedge fund further stated that BlockFi's proposed plan does not give Joint Liquidators a &#8220;meaningful opportunity to object to subordination&#8221; of its claims against the bankrupt lender.<\/p>\n<p>3AC said its claims against BlockFi exceed $220 million, making it one of the bankrupt lender's significant creditors.<\/p>\n<p>FTX and 3AC echoed the SEC's criticism, asserting that BlockFi failed to furnish enough information for stakeholders to appraise the feasibility of their plans.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Securities and Exchange Commission (SEC), alongside bankrupt crypto firms FTX and hedge fund\u00a0Three Arrows Capital (3AC), have objected to BlockFi&#8217;s bankruptcy plans, according to July 5 court filings. SEC opposes BlockFi&#8217;s plans In its filing, the SEC argued that the clauses in BlockFi&#8217;s proposed plans were ambiguous and broad, as they did not [&hellip;]<\/p>\n","protected":false},"author":720,"featured_media":340409,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[77901],"tags":[77827,76833,74981,77831],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEC, FTX, and Three Arrows Capital contest BlockFi&#039;s bankruptcy plans<\/title>\n<meta name=\"description\" content=\"BlockFi&#039;s proposed liquidation plan has drawn objections from the U.S. SEC, and bankrupt crypto firms, FTX and 3AC.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEC, FTX, and Three Arrows Capital contest BlockFi&#039;s bankruptcy plans\" \/>\n<meta property=\"og:description\" content=\"BlockFi&#039;s proposed liquidation plan has drawn objections from the U.S. SEC, and bankrupt crypto firms, FTX and 3AC.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-06T11:40:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-06T11:31:29+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/07\/blockfi.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Oluwapelumi Adejumo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Oluwapelumi Adejumo\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/sec-ftx-and-three-arrows-capital-contest-blockfis-bankruptcy-plans\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/#person\",\"name\":\"Oluwapelumi Adejumo\",\"url\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/oluwapelumi-adejumo\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/profile-photo-oluwapelumi-adejumo-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2025\/12\/profile-photo-oluwapelumi-adejumo-300x300.jpg\",\"caption\":\"Oluwapelumi Adejumo\"},\"jobTitle\":\"Senior Reporter\",\"description\":\"Oluwapelumi values Bitcoin's potential. 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