Key takeaways:
- Cryptocurrency lending firm BlockFi has declared bankruptcy and is prepared to reimburse some debtors.
- The firm will be allowed to process claims and allocate assets to its creditors.
According to a blog post published on October 24, cryptocurrency lending firm BlockFi has declared bankruptcy and is prepared to reimburse some of its debtors.
According to the statement, withdrawals “are currently available to nearly all Wallet customers.” It also mentioned that customers of Blockfi Interest Accounts (BIAs) and Loans would be able to take out certain assets starting in early 2024.
The post claims that BlockFi can now try to reclaim assets from other companies it feels owe it money because it emerged from bankruptcy. This includes defunct cryptocurrency exchanges like FTX and Three Arrows Capital (often referred to as “3AC”).
Additionally, the firm will be allowed to carry on processing claims and allocating assets to its creditors.
Customers of Wallet who have assets on BlockFi have been directed by the team to log into the app and submit a withdrawal request so that the withdrawal can be processed. BlockFi stated that it is preparing for the first distributions in line with the bankruptcy plan for BIA and Loan customers.
They anticipate making the first disbursements in the first part of 2024. After this, more payments will be issued, although the total amount will depend on several circumstances, including BlockFi’s performance in the FTX bankruptcy case.
BlockFi, a cryptocurrency lending platform, experienced initial liquidity issues in the middle of 2022 following the collapse of the Terra stablecoin. The platform was saved at the time by FTX with a $400 million credit line. After that, in November, FTX filed for bankruptcy, bringing BlockFi with it.
On August 17, a US court ruled that BlockFi may pay back its U.S.-based Wallet customers because the bankruptcy court had approved a plan to shut down the company and pay back creditors.
Customers in the US were not, however, permitted to withdraw at that time by the court. International customers can now withdraw from their BlockFi Wallets, according to a change to the withdrawal FAQ.
