BlockFi and DOJ Possibly Settle $35 Million Crypto Asset Transfer Lawsuit Amid Bankruptcy Proceedings

Key Points

1. The settlement ends a lawsuit filed in May 2023 over the DOJ's attempt to seize crypto assets in BlockFi accounts, with the DOJ arguing the bankruptcy court lacked jurisdiction.

2. Judge Michael B. Kaplan approved the settlement, which dismisses the case with prejudice, preventing it from being reopened and allowing BlockFi to proceed with its bankruptcy wind-down.

3. BlockFi declared bankruptcy in November 2022 after FTX's collapse and has since partnered with Coinbase to facilitate customer withdrawals.

4. BlockFi also settled an $875 million claim with FTX and Alameda Research estates in March 2023, addressing approximately $1 billion in claims related to FTX's collapse.

5. The resolution of the lawsuit highlights the intersection of crypto regulation, bankruptcy law, and federal enforcement, marking progress in BlockFi's bankruptcy process.