Breaking News: BlockFi’s Bankruptcy Saga Takes a Hilarious Turn!

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It is with no small degree of amusement that I relay the latest developments surrounding the infamous BlockFi bankruptcy proceedings, wherein the gallant administrator responsible for overseeing this financial quagmire has, in concert with none other than the venerable United States Department of Justice, reached a most agreeable settlement to dismiss a rather alarming lawsuit demanding the transfer of $35 million worth of crypto assets. To think that such a ludicrous sum might have belonged to a mere lending institution!

This momentous decision received the esteemed approval of His Honor, Judge Michael B. Kaplan, of the United States Bankruptcy Court for the District of New Jersey, an individual whose wisdom was undoubtedly warranted in this curious affair, as indicated by recent court filings. One might imagine him shaking his head in disbelief at the absurdity of it all. 😂

In the original complaint lodged in the month of May in the year of our Lord 2023, the Department of Justice sought to commandeer over $35 million in crypto riches from BlockFi, alleging some nefarious connection to two Estonian gentlemen embroiled in a criminal fraud undertaking that, let it be said, had little to do with the bankruptcy itself. It is almost poetic how such fiscal calamities transpire, is it not? 🧐

Oh What Fun! Case Dismissed with Prejudice

As per the stipulation, which may be akin to an ill-conceived pact among friends at a jovial gathering, the legal skirmish has been dismissed ‘with prejudice,’ a term which brings to mind the proverbial closing of doors that shall forever remain unopened. Each party, it seems, shall endure the burden of their own legal expenses—how delightfully merciful! đŸŽ©

Representing BlockFi’s stable of discontent was none other than Mohsin Meghji, the Plan Administrator, while the Department of Justice sent forth their gallant senior trial counsel, Mr. Seth B. Shapiro, who undoubtedly enjoyed the company of his fine team from the Civil Division’s Commercial Litigation Branch. What a merry band of litigators they must be!

Last May, in a stroke of what might be termed unscrupulous maneuvering, BlockFi announced its intentions to dismantle its web platform whilst engaging in a rather convenient partnership with Coinbase, allowing those still harboring BlockFi Interest Accounts and other financial trinkets to withdraw whatever remains of their digital bounty. Such ingenuity in the face of adversity deserves a nod, or perhaps a wry smile. 😏

Following the collapse of the infamous FTX in November 2022, which directly led to BlockFi’s rather unfortunate bankruptcy declaration, customers now face a thrilling deadline of April 28, 2024, to reclaim their digital treasures. What a captivating timeline for a drama so rich in intrigue!

A Settlement Surrounded by Schemers

In a prior episode of this unfolding drama, it be noted that BlockFi had reached a rather princely settlement of $875 million with both FTX and the estates of Alameda Research, settling about $1 billion in claims and illuminating the twists and turns of this confounding tale. CEO Zac Prince, by some accounts a tragic hero in this saga, bravely testified that the infamy of Sam Bankman-Fried, the founder of FTX, had direct consequences on BlockFi’s untimely descent into bankruptcy.

In a final flourish, the bankruptcy court, in a moment of benevolent wisdom, consented to BlockFi’s Chapter 11 plan in the month of September 2023, enabling the repayment of a staggering sum owed to over 10,000 creditors. In total, our dear BlockFi now languishes under an obligation of about $10 billion—that sort of number would make even the most stalwart businessman shudder!

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2025-07-12 10:58