Bankrupt BlockFi Gets Court’s Backing, Enables Withdrawal for US Customers

Bankrupt BlockFi Gets Court’s Backing, Enables Withdrawal for US Customers

Time Stamp: August 17, 2023 3:27 PM
Bankrupt BlockFi Gets Court’s Backing, Enables Withdrawal for US Customers PlatoBlockchain Data Intelligence. Vertical Search. Ai.

BlockFi,
the cryptocurrency lending firm that declared bankruptcy in November last year,
has secured the bankruptcy court’s approval to permit its users to withdraw
their digital assets. Earlier today (Thursday), BlockFi
opened the
withdrawal service nine months after blocking the feature on its platform.
However, the service is only currently available to customers in the United
States.

BlockFi
disclosed the opening of crypto withdrawals in a post published on X, noting
that the move “is an important step forward toward our goal of returning funds
to clients.”

“We
encourage all clients to check their email or BlockFi app to see if they are
eligible at this time,” the firm stated in the post. “We expect
more clients, including international clients, to become eligible to withdraw
digital assets from their wallet accounts as we move
forward in the court process.”

Some
customers of the bankruptcy digital asset lender also took to Twitter to
express delight at being able to withdraw their funds. However, others
expressed frustration at being unable to do so.

In the court order granted to BlockFi, Michael
Kaplan, the US Judge
handling the crypto lender’s bankruptcy proceedings, noted that the firm may enable withdrawals for
wallet accounts that received transfers from other non-wallet BlockFi accounts
during the 90 days before the firm had filed for bankruptcy. However, accounts that
received funds in excess of $7,575 during the period are being exempted.

BlockFi and Exposure to FTX

BlockFi is
one of the crypto firms that collapsed after Sam Bankman-Fried’s crypto empire,
including the once-leading cryptocurrency exchange , FTX crumbled in November
last year. Other such firms are digital asset lenders, Genesis, Celsius
Network and Voyager Digital.

BlockFi’s
troubles began in mid-2022 due to its exposure to the collapsed crypto-focused
hedge fund, Three Arrows Capital. However, the situation
worsened in November as BlockFi halted withdrawals on its platform, citing a “lack of clarity” on
FTX’s situation.

Although
FTX provided a revolving credit facility of $400 million to the firm as part of its rescue plan, the crypto lender ultimately filed for bankruptcy
protection in New Jersey, United States, in late
November. The move came days after the troubled FTX also
declared insolvency.

Moreover, uncensored
financial information uploaded by BlockFi in January showed that the crypto
lending firm had exposure of $1.2 billion to both
FTX and its sister crypto trading firm, Alameda Research, Finance Magnates reported.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

BlockFi,
the cryptocurrency lending firm that declared bankruptcy in November last year,
has secured the bankruptcy court’s approval to permit its users to withdraw
their digital assets. Earlier today (Thursday), BlockFi
opened the
withdrawal service nine months after blocking the feature on its platform.
However, the service is only currently available to customers in the United
States.

BlockFi
disclosed the opening of crypto withdrawals in a post published on X, noting
that the move “is an important step forward toward our goal of returning funds
to clients.”

“We
encourage all clients to check their email or BlockFi app to see if they are
eligible at this time,” the firm stated in the post. “We expect
more clients, including international clients, to become eligible to withdraw
digital assets from their wallet accounts as we move
forward in the court process.”

Some
customers of the bankruptcy digital asset lender also took to Twitter to
express delight at being able to withdraw their funds. However, others
expressed frustration at being unable to do so.

In the court order granted to BlockFi, Michael
Kaplan, the US Judge
handling the crypto lender’s bankruptcy proceedings, noted that the firm may enable withdrawals for
wallet accounts that received transfers from other non-wallet BlockFi accounts
during the 90 days before the firm had filed for bankruptcy. However, accounts that
received funds in excess of $7,575 during the period are being exempted.

BlockFi and Exposure to FTX

BlockFi is
one of the crypto firms that collapsed after Sam Bankman-Fried’s crypto empire,
including the once-leading cryptocurrency exchange , FTX crumbled in November
last year. Other such firms are digital asset lenders, Genesis, Celsius
Network and Voyager Digital.

BlockFi’s
troubles began in mid-2022 due to its exposure to the collapsed crypto-focused
hedge fund, Three Arrows Capital. However, the situation
worsened in November as BlockFi halted withdrawals on its platform, citing a “lack of clarity” on
FTX’s situation.

Although
FTX provided a revolving credit facility of $400 million to the firm as part of its rescue plan, the crypto lender ultimately filed for bankruptcy
protection in New Jersey, United States, in late
November. The move came days after the troubled FTX also
declared insolvency.

Moreover, uncensored
financial information uploaded by BlockFi in January showed that the crypto
lending firm had exposure of $1.2 billion to both
FTX and its sister crypto trading firm, Alameda Research, Finance Magnates reported.

Fortex integrates with Haame CRM; Colt Partners with AsiaNext; read today’s news nuggets.

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