In a significant development, a bankruptcy court in New Jersey has given the green light to BlockFi’s liquidation plan. This decision brings BlockFi customers one step closer to the possibility of reclaiming a portion of their funds.
The Road to Recovery
On September 26, 2023, Judge Michael Kaplan officially approved BlockFi’s plan, which outlines the process of selling off the company’s assets. The proceeds from these sales will be allocated to repay creditors, including the valued customers.
While the approval of the liquidation plan is undoubtedly a positive step, customers may still have questions about what to expect in terms of payouts. The actual amount each customer receives will depend on several factors, adding an element of uncertainty to the equation.
The outcome of BlockFi’s ongoing litigation with FTX and 3AC is one such variable that will influence the final payout. Additionally, the market value of BlockFi’s assets at the time of sale will also play a pivotal role.
According to the liquidation plan, unsecured creditors could potentially recoup anywhere between approximately 35% to 63% of their owed amounts. However, it’s crucial to understand that these figures are estimates. The final payout could vary, possibly exceeding or falling short of these projections.
Protecting Wallet Funds
One piece of good news amid the uncertainty is that BlockFi wallet holders are in a unique position. They have the opportunity to withdraw 100% of their funds, regardless of the outcome of the liquidation plan. Wallet funds are categorized as customer property and are not subject to the complexities of bankruptcy proceedings.
Streamlining the Recovery Process
A court filing from September 25 indicates that the BlockFi creditors committee recognized the potential benefits of the settlement. It likely contributed to reducing additional administrative fees and expenses that might have eroded recoveries.
As BlockFi customers look ahead, they can find some comfort in the approval of the liquidation plan. While the final payouts remain somewhat unpredictable, this significant step brings them closer to the prospect of recovering at least a portion of their funds. The BlockFi story continues to unfold, and customers will be watching closely for further developments in this ongoing saga.