FTX’s motion to sell trust assets draws limited objection from BlockFi

By Sarah Lizee

Olympia, Wash., Nov. 20 – FTX Trading Ltd.’s motion to sell or transfer in six digital currency trusts valued at roughly $744 million drew a limited objection from BlockFi Inc., according to documents filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

BlockFi said that through the motion, the FTX debtors seek to strip value from hundreds of thousands of individual BlockFi customers.

“BlockFi and its customers are among the victims of the historic fraud perpetrated by the FTX debtors,” BlockFi said in the objection.

“Many BlockFi customers have lost significant amounts of their life savings due to the FTX debtors’ fraud, yet the FTX debtors suggest they seek to strip liens that secured their debt to BlockFi and imply that only a faceless corporation will be impacted.”

BlockFi said that under the current circumstances, it has no objection to the sale of the trust assets, provided that its rights to the proceeds are fully reserved through revisions to the proposed order.

A hearing is scheduled for Nov. 29.

FTX has headquarters in the Bahamas and filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068. Based in Jersey City, N.J., BlockFi is a crypto financial services company that filed bankruptcy on Nov. 28, 2022 under Chapter 11 case number 22-19361 and emerged from the proceedings on Oct. 24.

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