Crypto lending platform BlockFi emerges from bankruptcy
Crypto lending platform BlockFi has announced its emergence from bankruptcy and plans to repay some of its creditors, according to a recent blog post. The platform states that withdrawals are now available to almost all Wallet customers, with BlockFi Interest Account (BIA) and Loan customers able to withdraw assets in early 2024.
Recovering assets and processing claims
With its bankruptcy resolved, BlockFi can now focus on recovering assets from other firms it believes owe it money, including Three Arrows Capital and FTX. The platform will also continue distributing assets to its creditors and processing claims.
Withdrawal instructions for customers
BlockFi has provided instructions for Wallet customers to submit withdrawal requests through the app. This will enable the team to process the withdrawals. BIA and Loan customers can expect initial distributions in early 2024, with further distributions depending on factors such as BlockFi’s success in FTX bankruptcy litigation.
The history of BlockFi’s liquidity problems
In mid-2022, BlockFi faced liquidity issues due to the collapse of the Terra stablecoin. FTX stepped in with a $400 million credit line to rescue the platform. However, FTX later went bankrupt in November, causing BlockFi’s downfall as well. In August, a U.S. court approved a plan for BlockFi’s wind-down and repayment of creditors. While U.S. customers were not initially allowed to withdraw, international users are now permitted to do so.
Hot Take: BlockFi bounces back after bankruptcy
After facing significant liquidity problems and going through bankruptcy proceedings, crypto lending platform BlockFi has made a comeback. With withdrawals now available to most Wallet customers and plans to distribute assets to creditors, BlockFi is on the path to recovery. The platform will also focus on recovering assets from other firms that owe it money. This development marks a positive turning point for BlockFi and its customers, signaling a fresh start after a challenging period. As the platform continues its journey, it remains to be seen how it will navigate the FTX bankruptcy litigation and other factors that will determine the amount of distributed funds in the future.
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