Bankrupt crypto firms BlockFi and FTX have reached an “in principle” agreement to settle their disputes, with FTX agreeing to pay up to $874.5 million to BlockFi and drop its claims against the f, according to a March 6 court filing.

Terms of the settlement are subject to approval by U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware.

The settlement would resolve BlockFi’s claims against FTX, totaling approximately a billion dollars, and will also see FTX waive “millions of dollars of avoidance claims and other counterclaims” against BlockFi.

The $874.5 million is made up of a $185.2 million claim against FTX.com — which represents the value of BlockFi customer assets held on the exchange — along with a $689.3 million claim against Alameda Research for the loans it received from BlockFi.

The proposed settlement states that $250 million of the total sum will be treated as a “secured claim,” which will prioritize payment to BlockFi after FTX emerges from bankruptcy. The remainder is contingent on FTX’s ability to first repay its own customers and other creditors.

BlockFi’s bankruptcy administrators said the result has been achieved with an “early mediation” which has cut litigation costs and ensures “that money reserved for litigation with FTX is directed instead to customer distributions.”

“This negotiated agreement represents an excellent outcome for BlockFi and its customers – one better than could have been anticipated even on the effective date of the Plan.”

BlockFi filed for Chapter 11 bankruptcy protection on Nov. 28, 2022, citing exposure to the shock collapse of FTX earlier that month.

The two companies had sued each other in 2023

BlockFi said FTX owed it over $1 billion which came from a $400 million line of credit in and nearly $900 million lent to Alameda Research. That loan was almost exclusively collateralized by FTX’s token, FTT, which fell nearly 99% from FTX’s collapse.

BlockFi also sued a holding company for Sam Bankman-Fried, seeking to recover 56 million in Robinhood shares that were allegedly pledged as collateral for BlockFi’s loans to Alameda Research.

However, BlockFi also owed FTX.US up to $275 million under a 2022 rescue loan deal.

Estimates show BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to bankrupt crypto hedge fund, Three Arrows Capital.

In addition to BlockFi Wallet customers, those who used an interest-bearing BlockFi account are expected to be able to withdraw some assets in 2024, too — however, the estimated payout isn’t clear.

BlockFi emerged from bankruptcy in October 2023 and opened a wallet to enable customer withdrawals.