Effective immediately, beleaguered cryptocurrency lending platform BlockFi which was forced to halt withdrawal when FTX collapsed, has announced its earlier than expected emergence from bankruptcy in complement to the effectiveness of its bankruptcy plan.
Historic BlockFi Bankruptcy Re-emergence
Following this milestone, the crypto firm, which was caught in the contagion spread from the implosion of FTX, can legally begin to carry out all of the strategies outlined in its Reorganization Plan. Top of this list is repaying its creditors and all those who were imparted by the suspension of BlockFi operations, based on the terms of the Plan.
“BlockFi’s management, advisors, and other stakeholders worked diligently over the past 11 months to reach this critical milestone. We are proud to say that BlockFi reached its Effective Date more quickly and efficiently than many other retail crypto companies,” per the official BlockFi announcement.
Also, BlockFi is now at liberty to pursue the recovery of all assets and loans owed to the company by the likes of Three Arrows Capital (3AC), FTX and others. The extent of client recoveries is highly dependent on the success of BlockFi’s litigation. Notably, a financial document which was mistakenly uploaded at the beginning of this year revealed that BlockFi has more than $1.2 billion linked to SBF’s FTX and Alameda Research.
The crypto lender will continue with the distribution of digital assets to clients including BlockFi Interest Account (BIA) holders. Concurrently, the process of claim reconciliation for clients will continue without interruption. This is to ensure that every claim is reflected in both asset class as well as amount. Another reason is to make sure that all clients receive fair and equitable distributions of remaining and recovered assets.
BlockFi Resumes Withdrawal
Already, the bankruptcy judge has approved the repayment of up to $300 million to BlockFi custody wallet owners. So far, almost all wallet customers have been granted access to their accounts and withdrawals have been restored. All that is required is for a customer to log into BlockFi.com and submit a withdrawal request.
On the other hand, BIA holders and Retail Loans clients are expected to receive an email in the coming months, prompting them to withdraw their funds based on the recovery amounts approved by the Plan.
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