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BlockFi Makes Significant Progress Toward Exiting Bankruptcy Proceedings

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Oct 4, 2023 at 06:17 am

BlockFi recently revealed that it is in the final stages of completing its restructuring plan, pending approval from a bankruptcy judge. In a message directed to creditors, the plan has garnered the green light from BlockFi's creditors, marking a substantial stride in the lengthy endeavor to wind down operations and compensate clients.

This development follows BlockFi, along with several other digital asset firms, grappling with the fallout from FTX's disruption last autumn, which led to the freezing of customer accounts and eventual collapse. The ratified restructuring scheme, backed by over 90% of creditors, is poised to facilitate the recuperation of assets lost in the crypto exchange FTX and the beleaguered hedge fund, Three Arrows Capital. The primary objective is to enhance the financial returns for BlockFi's creditors.

The message conveyed to creditors underscored the potential for heightened client recoveries, contingent on the specific product and jurisdiction.

As of now, BlockFi's legal representatives have refrained from immediate comments on this matter.

The finalization of the plan hinges on approval from a bankruptcy court, as articulated in BlockFi's correspondence. Once given the green light, the company will initiate the disbursement of the allocated funds to its creditors.

For customers with funds in BlockFi Interest Accounts or BlockFi Retail Loans, the company foresees the return of their funds in the upcoming months. Furthermore, BlockFi has pledged to sustain the distribution of funds to its BlockFi Wallet clients.

Read more: Sam Bankman-Fried's Legal Battle: Will FTX Founder Triumph or Face Conviction?

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