Crypto lending platform BlockFi has successfully emerged from bankruptcy. Effective October 24, BlockFi has initiated the process of repaying some of its creditors, allowing customers to withdraw their assets from their BlockFi Wallets.
Furthermore, BlockFi has outlined plans for customers with BlockFi Interest Accounts (BIA) and loans to withdraw their assets in early 2024.
This breakthrough enables BlockFi to actively pursue the recovery of assets from entities it believes owe the company money. Notable among these entities are cryptocurrency platforms like Three Arrows Capital, also known as “3AC,” and FTX.
BlockFi is now in a position to continue the distribution of assets to its creditors and process claims, marking a fresh start for the platform.
For BlockFi Wallet customers who have assets stored with the platform, the company encourages them to log into the app and initiate a withdrawal request, enabling the BlockFi team to facilitate these transactions.
The initial distributions are expected to occur in early 2024, with further distributions to follow, depending on BlockFi’s progress in the FTX bankruptcy litigation and other factors.
A Fresh Start After Asset Recoveries BlockFi encountered liquidity challenges in mid-2022, primarily stemming from the Terra (LUNA) collapse. To rescue the platform, FTX extended a $400 million credit line, providing much-needed support.
However, the situation took a downturn when FTX itself filed for bankruptcy in November, causing a ripple effect on BlockFi. The bankruptcy court approved a plan for BlockFi to wind down its operations and repay its creditors on August 17.
It was revealed that BlockFi had retained substantial amounts of its clients’ funds within FTX, despite having prior knowledge of the exchange’s questionable financial state.