BlockFi Resurfaces from Bankruptcy, Restores Wallet Withdrawal Access
Crypto lending platform BlockFi has successfully emerged from bankruptcy and is now in a position to repay some of its creditors, as confirmed in a blog post on October 24.
The post indicates that nearly all Wallet customers can initiate withdrawals at this time, while BlockFi Interest Account (BIA) and Loan customers will have the ability to withdraw certain assets in early 2024.
BlockFi’s resurgence from bankruptcy enables the platform to pursue the recovery of assets from other entities it believes owe it money. This includes financially distressed crypto platforms like Three Arrows Capital, also known as “3AC,” and FTX. The company will also continue the process of distributing assets to its creditors and handling claims.
For Wallet customers with assets on BlockFi, the team has advised them to log into the app and submit withdrawal requests, facilitating the withdrawal process.
As for BIA and Loan customers, BlockFi is gearing up for initial asset distributions in alignment with the bankruptcy plan, with the first distributions expected to take place in early 2024. Subsequent distributions will follow, but the extent of the funds distributed will hinge on BlockFi’s success in the FTX bankruptcy litigation, among other factors.
It is worth noting that BlockFi faced liquidity issues in mid-2022 when the Terra stablecoin encountered difficulties. FTX came to BlockFi’s rescue at that time with a $400 million credit line. However, FTX itself declared bankruptcy in November, taking BlockFi down with it.
On August 17, a U.S. court approved a plan to wind down the company and repay creditors, allowing BlockFi to repay U.S.-based Wallet customers. Nonetheless, U.S. customers were not granted immediate withdrawal rights at that time.
The latest BlockFi Wallet withdrawal FAQ now confirms that international users can withdraw funds.
