BlockFi's bankruptcy administrator and the US Department of Justice (DOJ) have settled a $35 million lawsuit concerning the transfer of crypto assets. This agreement, approved by Judge Michael B. Kaplan of the US Bankruptcy Court for the District of New Jersey, resolves litigation that sought to transfer over $35 million in crypto from BlockFi to the US government. The DOJ claimed the authority to seize these funds from accounts linked to two Estonian citizens involved in a separate criminal fraud case. They argued the bankruptcy court lacked jurisdiction over these funds. Under the settlement, the case is dismissed with prejudice, preventing it from being refiled, and each party is responsible for its own legal costs. BlockFi's Plan Administrator, Mohsin Meghji, represented the firm, while the DOJ was led by senior trial counsel Seth B. Shapiro. This lawsuit emerged after BlockFi's Chapter 11 bankruptcy proceedings followed their partnership with Coinbase to allow client withdrawals. BlockFi has been addressing claims related to its insolvency since the collapse of FTX in late 2022. The bankruptcy court had previously approved BlockFi's plan to repay over 10,000 creditors.

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