BlockFi set to receive $9.85 million through Silvergate release

By Sarah Lizee

Olympia, Wash., March 3 – BlockFi Inc. is set to receive $9.85 million through a release from Silvergate Bank from a reserve account, according to a stipulation and order filed Friday with the U.S. Bankruptcy Court for the District of New Jersey.

Prior to BlockFi’s bankruptcy filing, the company and Silvergate entered into an ACH origination agreement dated Nov. 26, 2021, under which BlockFi agreed to establish a reserve in the amount of $10 million.

The agreement provided that the reserve account would terminate 90 days after the receipt of the last originated ACH transfer and the termination of the ACH origination agreement, and BlockFi would then have unrestricted access to the funds in the reserve account.

BlockFi’s transfer originations through Silvergate accounts have been suspended since Nov. 17.

According to the order, Silvergate will keep the remaining $150,000 in the reserve to cover any ACH originations that are returned under the National Automated Clearing House Association rules and guidelines up until the later of the date that the debtors terminate the origination agreement and Nov. 17, 2024.

The $150,000 will be released to the debtors within two business days following the termination date.

Based in Jersey City, N.J., BlockFi is a crypto financial services company. The company filed bankruptcy on Nov. 28 under Chapter 11 case number 22-19361.

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