BlockFi, the cryptocurrency lending platform, has emerged from bankruptcy, marking a pivotal turning point for the company.
In an official blog post dated 24 October, the company detailed its plans for repaying creditors and facilitating withdrawals, opening the door to significant developments in its post-bankruptcy phase.
The blog post elucidates that withdrawals are currently accessible to a broad spectrum of BlockFi Wallet customers.
Importantly, BlockFi Interest Account (BIA) and Loan customers will gain the ability to withdraw some of their assets in early 2024.
This move, heralded by BlockFi’s emergence from bankruptcy, signifies a pivotal moment for the platform.
With this status change, BlockFi is now poised to seek the recovery of assets from other entities it believes are indebted to it.
This includes engagements with financially troubled cryptocurrency platforms such as Three Arrows Capital (3AC) and FTX.
Additionally, BlockFi can continue to facilitate the distribution of assets to its creditors and efficiently process claims.
To facilitate the withdrawal process, BlockFi’s team has issued clear instructions for Wallet customers with assets on the platform.
Users are encouraged to log into the app and initiate a withdrawal request, allowing the team to streamline the process efficiently.
For BIA and Loan customers, BlockFi is preparing for the initiation of distributions in accordance with the bankruptcy plan.
The first distribution phase is expected to take place in early 2024, with subsequent distributions contingent on BlockFi’s progress in the FTX bankruptcy litigation, among other variables.
The backstory of BlockFi’s financial journey is notable.
The platform initially encountered liquidity challenges in mid-2022, primarily due to the Terra stablecoin’s downturn.
To rescue BlockFi at that time, FTX extended a $400 million credit line.
However, FTX itself faced insolvency in November, dragging BlockFi into a complex financial situation.
On 17 August, a United States (US) court granted approval for BlockFi to commence repaying US-based Wallet customers, in alignment with the approved bankruptcy court’s plan to wind down the company and settle outstanding creditor claims.
While US customers were initially restricted from making withdrawals, BlockFi’s latest update, as outlined in the Wallet withdrawal FAQ, signals an important milestone: international users are now granted access to the withdrawal process.