BlockFi argues FTX, Three Arrows Capital isn’t entitled to repayments

“To avoid additional injustice to the lenders of BlockFis estates, the Court must prohibit the FTX Claims under the doctrine of unclean hands,” BlockFi added.FTX also supplied $400 million to BlockFi in June 2022 in addition to purchasing BlockFi equity pursuant to a loan contract, the filing stated.However, BlockFi declared it wasnt a standard loan agreement– it was an unsecured, 5-year term that was well below market interest rates and payments werent due up until the firm would supposedly mature.BlockFi referred to FTXs financial investment as a “gamble” that BlockFi financial institutions shouldnt be accountable for.”Just due to the fact that FTXs fraudulent actions caused FTXs bet to stop working does not indicate BlockFis lenders are now in some way liable to reimburse the purchase cost,” it argued.BlockFi recommended a loan from FTX was a “gamble” that the market would stabilize. BlockFi claimed 3AC dedicated fraud with the cash it obtained and argued it also should not be entitled to a prospective repayment.BlockFi claims its litigation with FTX, 3AC and other firms might cost it up to $1 billion– impacting the amount its creditors are owed.Related: BlockFi opens crypto withdrawals for qualified United States users following court orderSeveral BlockFi financial institutions formerly implicated the company of overlooking numerous red flags prior to transacting with FTX and its trading firm Alameda Research in the months prior to FTXs collapse in November 2022.