Crypto lending platform BlockFi has successfully emerged from bankruptcy and is now in a position to repay some of its creditors. In a blog post on October 24, the company announced that withdrawals are now available to nearly all Wallet customers. The post also mentioned that BlockFi Interest Account (BIA) and Loan customers will be able to withdraw some assets in early 2024.
According to BlockFi, its emergence from bankruptcy allows it to pursue the recovery of assets from other firms that owe it money. This includes bankrupt crypto platforms such as Three Arrows Capital (also known as “3AC”) and FTX. The company will also continue to distribute assets to its creditors and process claims.
BlockFi has instructed Wallet customers with assets on its platform to log into the app and submit a withdrawal request. This will enable the team to process the withdrawal. As for BIA and Loan customers, BlockFi is preparing for initial distributions in accordance with the bankruptcy plan. The first distributions are expected to be made in early 2024. Subsequent distributions will depend on BlockFi’s success in FTX bankruptcy litigation and other factors.
BlockFi faced liquidity problems in mid-2022 when the Terra stablecoin collapsed. FTX came to the rescue by providing a $400 million credit line to the platform. However, FTX itself went bankrupt in November, causing BlockFi to suffer the same fate. In August, a U.S. court approved a plan for BlockFi to wind down the company and repay creditors, allowing it to repay U.S.-based Wallet customers. However, at that time, U.S. customers were not allowed to withdraw. The current update states that international users are now permitted to withdraw.
This development marks a significant milestone for BlockFi as it strives to recover from its financial challenges and fulfill its obligations to creditors. With the ability to repay some of its debts, the company can now focus on rebuilding its reputation and restoring trust within the crypto lending industry.
– BlockFi Blog Post: [Link to credible source]
– BlockFi Twitter Announcement: [Link to credible source]
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