BlockFi Emerges from Bankruptcy, Allowing Clients to Withdraw Assets
The US-based crypto lending company BlockFi has successfully emerged from bankruptcy, enabling its clients to begin the process of withdrawing their assets. This development comes nearly 11 months after BlockFi faced challenges due to the collapse of FTX, which had a significant impact on the cryptocurrency industry.
BlockFi’s Bankruptcy Plan Takes Effect
BlockFi has announced that it is winding down operations and returning crypto assets to its customers. Additionally, the company is actively seeking additional payments through the bankruptcies of other crypto companies, such as FTX and Three Arrows Capital, as stated in the court-approved bankruptcy plan.
The outcome of these litigations could have a substantial effect on client recoveries and contribute to BlockFi’s financial stability. According to recent court filings, customers with interest-bearing Earn accounts may recover between 39.4% and 100% of the value in their accounts.
BlockFi initially filed for bankruptcy in November 2022, citing its loans to Alameda, FTX’s sister firm, as one of the contributing factors to its collapse. The ongoing fraud trial of FTX founder Sam Bankman-Fried in Manhattan adds further complexity to the situation.
BlockFi Clients Can Submit Withdrawal Requests
While withdrawals are currently available for most of BlockFi’s Wallet customers, those with BlockFi Interest Accounts and Retail Loans can expect repayments in the coming months. The amounts received may depend on the outcome of the FTX bankruptcy proceedings.
For BlockFi Wallet customers, withdrawal requests can be submitted until December 31, 2023, with the withdrawal window closing at 23:59 UTC.
Hot Take: BlockFi Recovers from Bankruptcy, Offering Hope to Affected Clients
After a challenging period, BlockFi has emerged from bankruptcy, providing its clients with the opportunity to withdraw their assets. The company’s bankruptcy plan is now in effect, and it is actively pursuing additional payments through litigations with other crypto companies.
While the outcome of these proceedings may impact client recoveries, there is optimism as BlockFi estimates that customers with interest-bearing accounts could recover a significant portion of their assets. Withdrawal requests are currently open for most Wallet customers, and repayments for Interest Accounts and Retail Loans will follow in the coming months.
This development marks a step towards restoring BlockFi’s financial stability and offers hope to those affected by the company’s previous challenges.
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