BlockFi and the U.S. Department of Justice have reached a $35 million settlement in a dispute over crypto asset transfers, resolving jurisdictional conflicts and advancing BlockFi’s bankruptcy wind-down efforts. The agreement received court approval from Judge Michael B. Kaplan, dismissing the case with prejudice and preventing future litigation on the matter.
The lawsuit originated in May 2023 when the DOJ sought to seize cryptocurrency assets held in BlockFi accounts while challenging the bankruptcy court’s jurisdiction over federal forfeiture claims. This resolution eliminates a significant legal barrier to BlockFi’s restructuring process.
BlockFi initiated Chapter 11 bankruptcy proceedings in November 2022 following FTX’s collapse. Since then, the company has actively managed its liquidation process, including establishing a withdrawal mechanism through Coinbase and resolving an $875 million claim with FTX and Alameda Research estates in March 2023.
The settlement marks progress in reconciling crypto regulatory enforcement with bankruptcy law procedures. It also highlights the federal government’s evolving approach to cryptocurrency asset forfeiture cases within bankruptcy frameworks.