BlockFi Initiates Withdrawals for Eligible Users’ Wallets
BlockFi, a New Jersey-based crypto lending company, has started allowing eligible users in the US to withdraw funds from their wallets. This action is in compliance with a court order issued by the US Bankruptcy Court for the District of New Jersey. However, due to ongoing legal proceedings, these withdrawals only apply to some wallets managed by international users.
Key Points:
- The withdrawals are only available to US-based BlockFi Wallet account holders who meet certain criteria.
- BlockFi sought Chapter 11 bankruptcy protection in November 2022 due to issues related to FTX.
- The company received a $400 million credit facility from FTX in July, but this came with conditions.
- BlockFi expressed surprise at FTX’s bankruptcy filing and suspended withdrawals.
- In May 2023, BlockFi gained court approval to update user interfaces and enable fund withdrawals.
BlockFi’s Turbulent Journey: Bankruptcy Threats, Bailouts, and the Path to Recovery
BlockFi faced bankruptcy and halted client withdrawals in November 2022. The company later suspended withdrawals due to operational challenges related to FTX.com, FTX US, and Alameda Research. BlockFi’s management and board took action to protect clients and the company. In May 2023, court approval was obtained to update user interfaces and enable fund withdrawals. Finally, in August 2023, a court order granted BlockFi permission to initiate withdrawals after a nine-month break.
Hot Take:
BlockFi’s journey has been fraught with challenges, from bankruptcy threats to operational issues. While the recent court order allowing withdrawals is a positive step, the company still faces legal proceedings and a hefty SEC penalty. The future of BlockFi remains uncertain, but efforts are being made to reimburse users and navigate the path to recovery.
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