One of the several bankrupt crypto lenders, BlockFi is blocking funds retrieving attempts from its creditors FTX and Three Arrow Capital (3AC) saying it shouldn’t be pushed to payback for ‘their fraud.’
BlockFi filed for Chapter 11 bankruptcy in November 2022 following FTX’s collapse. It owes approximately $10 billion to its creditors including bankrupt 3AC and FTX exchange.
In a latest Court filing, BlockFi exclaimed that it should not pay for what FTX did with its creditors’ funds. With this statement, the crypto lender is blaming FTX exchange for its own fraudulent actions thereby BlockFi’s estate is not liable to pay for it.
BlockFi’s clients and creditors says that FTX seeks to recover claimed $5 billion from the BlockFi’s estates at the direct expense of the ultimate victims of its own fraud.
“To prevent further injustice to the creditors of BlockFi’s estates, the Court should disallow the FTX Claims under the doctrine of unclean hands,” BlockFi said in the filing.
It argues that just because FTX’s actions caused the loss of its creditors funds, it “does not mean BlockFi’s creditors are now somehow liable to refund the purchase price.”
Also Read: FTX Debtors Revise Settlement Plan Amid US Trustee Objection
Similarly, it claimed that 3AC committed fraud on its own with borrowed money hence it is also not entitled for any repayment. BlockFi owes $220 million to the 3AC which is asked for the repayment by 3AC’s liquidators.
The statement comes ahead after BlockFi revealed a plan to refund its creditors on 3rd August.
