The US-based crypto lending company BlockFi has emerged from bankruptcy, allowing clients to begin the process of withdrawing their assets.
This development comes nearly 11 months after BlockFi was caught in the turbulence of the cryptocurrency industry, triggered by the disastrous collapse of FTX.
BlockFi’s Bankruptcy Plan Takes Effect
BlockFi has announced that it is winding down operations and returning crypto assets to its customers.
Furthermore, it is actively pursuing additional payments through the bankruptcies of other crypto companies, including FTX and Three Arrows Capital, as stipulated in the bankruptcy plan approved in court last month.
The outcome of these litigations could significantly impact client recoveries, as BlockFi seeks to restore its financial stability.
In its recent court filings, the company estimated that customers with interest-bearing Earn accounts could recover between 39.4% and 100% of the value in their accounts, providing some optimism for those affected.
BlockFi’s initial bankruptcy filing in November 2022 had pointed to its loans to FTX’s sister firm, Alameda, as one of the contributing factors to its collapse.
Meanwhile, FTX founder Sam Bankman-Fried is currently on trial for fraud in Manhattan, adding a layer of complexity to the ongoing situation.
BlockFi Clients Can Submit Withdrawal Requests
While withdrawals are currently available to almost all of BlockFi’s Wallet customers, those with BlockFi Interest Accounts and Retail Loans can expect repayments in the coming months.
However, the amounts received may be contingent on the outcome of the FTX bankruptcy proceedings.
For BlockFi Wallet customers, withdrawal requests can currently be submitted, and the withdrawal window closes at 23:59 UTC on December 31, 2023.