BlockFi Emerges from Bankruptcy, Prepares to Reimburse Creditors and Enables Asset Withdrawals
Summary:
BlockFi, a cryptocurrency lending platform, has emerged from bankruptcy and is gearing up to repay its creditors, with withdrawals now available to most Wallet customers. The firm's bankruptcy exit will also allow it to seek recovery of assets from firms like Three Arrows Capital and FTX, both bankrupt crypto platforms. BlockFi Interest Account (BIA) and Loan holders can anticipate early asset withdrawals in 2024. The quantum of funds to be distributed hinges on several factors, including the outcome of BlockFi's litigation against FTX bankruptcy. BlockFi initially faced liquidity issues in mid-2022 due to the collapse of the Terra stablecoin, however, it currently permits international users to withdraw assets.
Emerging from bankruptcy, BlockFi, a cryptocurrency lending platform, is preparing to remunerate some of its creditors, the company announced in a blog post on October 24. Currently, most Wallet customers can seamlessly execute withdrawals, as mentioned in the post. Moreover, opportunity to withdraw certain assets by early 2024 will be provided to BlockFi Interest Account (BIA) and Loan holders.
The aforementioned blog post implies that BlockFi's bankruptcy exit permits the company to pursue the recovery of assets from other companies, which they believe are indebted to them. This specifically includes bankrupt cryptocurrency platforms like Three Arrows Capital (also referred to as “3AC”) and FTX. Besides, the bankruptcy emergence enables the company to carry on the allocation of assets to its creditors and managing claims.
For Wallet holders owning assets on BlockFi, the team advises them to access the app and initiate a withdrawal request, facilitating the processing of the same. For BIA and Loan customers, the company aims to arrange the preliminary distributions in line with the bankruptcy plan, with expectations for the maiden distributions to occur in early 2024. There would be subsequent distributions following this phase, but the total fund distribution amount will hinge on the result of BlockFi's litigation against FTX bankruptcy, among other determinants.
To recall, BlockFi, a crypto lending platform, underwent liquidity issues in mid-2022 as the Terra stablecoin went under. FTX consequently provided a financial lifeline to the ailing platform with a $400 million credit facility. However, FTX declared itself bankrupt in November, thereby pulling BlockFi under as well. A U.S court ruled on August 17 that BlockFi should be permitted to pay off US-based wallet customers, following the approval of plans to unwind the company and repay the creditors by the bankruptcy court. The court, however, refrained from allowing US customers to withdraw at that time. Currently, updated information about withdrawal provisions for international users has been accommodated in the BlockFi Wallet withdrawal FAQ.
Published At
10/24/2023 7:26:42 PM
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