BlockFi’s bankruptcy estate administrator and the Department of Justice (DOJ) have reached a settlement to dismiss a $35 million crypto asset transfer lawsuit, according to court filings dated Friday.
Filed in May 2023, the case sought transfer of approximately $35 million in digital assets held by BlockFi from two Estonian citizens’ accounts. The DOJ alleged it possessed warrants to seize these funds in a separate criminal fraud investigation, unrelated to BlockFi’s insolvency.
BlockFi’s administrator, Mohsin Meghji, opposed the DOJ’s request to seize the assets, arguing that jurisdictional hurdles prevented the government from halting the transfer during bankruptcy proceedings.
Settlement Reached
As part of the settlement, the case was dismissed “with prejudice,” barring any future filing. Each party agreed to bear its own legal fees and costs.
The DOJ was represented by Senior Trial Counsel Seth B. Shapiro; BlockFi’s administrator was counsel to the estate.
BlockFi Updates
In May 2024, BlockFi announced the closure of its web platform and a partnership with Coinbase for remaining client withdrawals. The company earlier declared bankruptcy in November 2022, setting a final withdrawal deadline of April 28, 2024.
Previous Settlement
Earlier this year, BlockFi reached an $875 million settlement resolving debts with FTX and Alameda Research, though related proceedings remain sealed. The company continues repaying creditors under Chapter 11 protection, owing approximately $10 billion across over 100,000 claims.
Source: Cryptonews
A snippet of the lawsuit. Source: Bloomberg Law
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