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 accordance with a March 3 submitting.
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.
That settlement acknowledged 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 event is seemingly unrelated to a current and broader controversy round Silvergate. This week, Silvergate mentioned that it will delay its 10-Ok submitting and alluded to varied ongoing regulatory investigations, which in flip led a number of main crypto firms to distance themselves from the crypto-friendly financial institution.
The court docket order is as a substitute a part of BlockFi’s ongoing chapter proceedings. The crypto lending agency filed for bankruptcy in November 2022. It has greater than 100,000 collectors and owes between $1 billion and $10 billion to these collectors.
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