BlockFi Shares Withdrawal Plans After Emergence From Bankruptcy

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BlockFi, the crypto lending platform that faced bankruptcy last year, has embarked on the process of returning assets to its customers, marking a significant milestone in its financial recovery. The official announcement signals the company’s successful emergence from bankruptcy, with its reorganization plan garnering approval from all pertinent stakeholders.

BlockFi to Reclaim Owned Assets

As detailed in the bankruptcy plan, BlockFi will begin a recovery process to reclaim assets and loans owed to it by beleaguered firms like FTX, and Three Arrows Capital (3AC). The lender will also process claims and redistribute reclaimed assets to its creditors according to its bankruptcy plan.

The commencement of asset returns underscores BlockFi’s commitment to resolving the challenges it faced during its bankruptcy period. Customers, who may have experienced uncertainties during this time, can now anticipate the restitution of their assets as the platform moves forward with its approved reorganization plan.

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BlockFi Reopens Withdrawals for Clients

As per an official blog post, the crypto lender has begun enacting the details of its bankruptcy plan dubbed “the Plan”.

Consequently, the firm has invited wallet customers to submit withdrawal requests noting that withdrawals are now available to almost all its wallet customers. Eligible customers are enjoined to utilize the wallet withdrawal window set to close on December 31, 2023, to retrieve their assets in crypto as approved by the Plan.

Meanwhile, the lender’s BIA and Loan customers will have to wait until early 2024 when its initial distribution will be made. Afterward, other distributions will be made depending on its success in recovering assets owned by FTX among other factors.

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BlockFi’s Financial Report Raises Questions

Recall that, BlockFi was under fire for publishing a financial report that contained exposure figures that differed from those previously published by its lawyers. The report that was accidentally published by the crypto lender revealed that the firm has up to $1.2 billion exposure to the defunct FTX and its subsidiary firm, Alameda Research LLC.

However, this caused concern in the online community because BlockFi’s previously uploaded data indicated an even lower exposure to the bankrupt exchange in BlockFi’s defense, one of its lawyers, Joshua Sussberg, stated that the financial reports in court documents differed because one figure marked a loan from Alameda Research, which used FTX’s native utility token as collateral, down to zero.

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