According to a recent announcement, BlockFi, a prominent cryptocurrency lending platform, has emerged from bankruptcy as of October 24, 2023.
After months of “diligent efforts” by BlockFi’s management, advisors, and stakeholders, the company has reached this significant milestone more “swiftly and efficiently” compared to many other retail crypto companies, according to the lending company’s announcement.
Client Recoveries Potentially Boosted
Emergence signifies the official commencement of BlockFi’s implementation of its bankruptcy plan, which includes the repayment of creditors according to the plan’s terms.
Per the announcement, the following actions outlined in the plan will be carried out:
Recoveries: BlockFi will endeavor to recover assets it believes are owed by entities such as FTX, 3AC, and other companies and their bankruptcy estates. Successful litigation in this regard has the potential to increase client recoveries.
Withdrawals: The distribution of digital assets back to clients, including BlockFi Interest Account (BIA) holders, will continue.
Claims: The claims reconciliation process will be ongoing to “ensure an accurate reflection” of client claims regarding asset class and amount, enabling fair and equitable distributions of remaining and recovered assets.
For customers with funds in BlockFi Wallet, withdrawals are currently available to nearly all Wallet customers. It is advised to log in to BlockFi.com and submit a withdrawal request to initiate the process. Detailed information can be found in the Wallet Withdrawal FAQs provided by BlockFi.
BlockFi Begins Wind-Down Process For BIA
Regarding BIA and Loan customers, as BlockFi has now emerged from bankruptcy, preparations for the wind-down process outlined in the plan are underway.
The Plan Administrator and the remaining employees are “working diligently” to facilitate an initial distribution of available assets from the wind-down estate, to commence initial distributions in early 2024.
Subsequent distributions will depend on various factors, including any recoveries from FTX and its affiliates. Clients holding funds in BIA and Retail Loans will receive email notifications in the coming months, prompting them to withdraw their funds based on the approved recovery amounts specified in the plan.
According to the announcement, this initial wave of distributions will be followed by additional distributions, the extent of which will be influenced primarily by BlockFi’s involvement in the FTX bankruptcy cases.
Furthermore, eligible BlockFi Wallet holders must take prompt action and submit their withdrawal requests before the Wallet withdrawal window closes on December 31, 2023.
Once the Wallet withdrawal window concludes, the crypto lender will focus on opening withdrawals for BIA and Retail Loan holders to initiate the distribution of estate funds.
As the company progresses through its post-bankruptcy phase, further updates on the timing and details of the distribution process will be communicated to clients.
Featured image from Shutterstock, chart from TradingView.com