Tuesday, April 16, 2024

Silvergate to return $9.85M deposit to BlockFi

Silvergate Financial institution has been ordered to return $9.85 million to BlockFi as a part of the latter agency’s ongoing chapter proceedings, in keeping with a March 3 submitting.

BlockFi will see $9.85 million returned

That court docket submitting says BlockFi and Silvergate entered an settlement in August 2020 the place Silvergate acted as a depository establishment to deal with sure ACH transactions. In November 2021, BlockFi agreed to determine a reserve containing $10 million.

The settlement said that the account would terminate 90 enterprise days after the final related switch, granting BlockFi unrestricted entry to these funds.

Consequently, Silvergate is now compelled to launch $9.85 million from the reserve account. It’s permitted to carry the remaining $150,000 within the reserve account.

The court docket order is a part of BlockFi’s ongoing chapter proceedings. The crypto lending agency filed for chapter in November 2022. It has greater than 100,000 collectors and owes between $1 billion and $10 billion to these collectors.

The connection between BlockFi and Silvergate

After BlockFi filed for chapter in November 2022, Silvergate stated that it had lower than $20 million of publicity to BlockFi. It additionally stated that it was not a custodian for BlockFi’s Bitcoin-collateralized SEN Leverage loans and had no investments in BlockFi.

The 2 corporations nonetheless maintained an in depth relationship. BlockFi known as Silvergate a “banking accomplice” on Nov. 10 and stated that it will halt ACH and wire processing for 3 days as a consequence of Silvergate’s observance of a vacation. Later that very same day, BlockFi introduced that it will halt withdrawals indefinitely as a consequence of FTX’s separate collapse.

This week’s court docket order compelling the return of funds is seemingly unrelated to a current controversy round Silvergate. On Mar. 1, Silvergate stated that it will delay its 10-Okay submitting and alluded to varied ongoing regulatory investigations.

That improvement led a number of main crypto corporations to distance themselves from the crypto-friendly financial institution. BlockFi didn’t touch upon Silvergate’s points this week.

Posted In: Chapter, Lending

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