BlockFi, the cryptocurrency lending company currently under U.S. Chapter 11 protection, has filed a favorable claim for some of its customers. Indeed, BlockFi has filed a request with the court to allow some of its users to withdraw their funds hosted on the platform’s wallet.
BlockFi wants to refund some of its users
BlockFithe cryptocurrency lender previously declared bankrupt on November 28, seeks to reimburse some of its injured customersaccording to a court document dated December 19.
The petition, filed in the New Jersey bankruptcy court, seeks to allow BlockFi users to make their cryptocurrency withdrawals as normal. It’s about customers who have funds currently blocked on their wallet hosted on the platform.
Indeed, BlockFi offered 2 distinct types of services: a yield service and a cryptocurrency custody service. The motion here filed by BlockFi concerns exclusively users with funds on a walletand not those who have used the platform’s returns service.
The news was notably shared by the investigator Tiffany Wongrecently highlighted for his interview with Sam Bankman-Fried:
wow, @BlockFi has already filed a motion requesting client withdrawals for assets held in BlockFi Wallet Accounts. N/A to BlockFi for moving exponentially more quickly than @CelsiusNetwork in Ch 11. pic.twitter.com/JvtWzMklNA
— Tiffany Fong (@TiffanyFong_) December 20, 2022
“WOW, BlockFi has already filed a motion to allow customers to withdraw their assets held in BlockFi Wallet accounts. Hats off to BlockFi for moving much faster than Celsius Network in Chapter 11.”
According to a second court filing, BlockFi also wants to update its user interface “ in order to correctly reflect the assets blocked since the shutdown of the platform “.
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BlockFi caught in the cogs of FTX
The cryptocurrency lending company had already found itself in some difficulty following the collapse of hedge fund Three Arrows Capital (3AC) last Maysince the company, declared bankrupt, was unable to repay billion dollar loan from BlockFi.
But the fatal blow was hit on him by the bankruptcy of FTX, since the exchange had established a rescue agreement in June with BlockFi in order to help it raise the bar. As a result, the cryptocurrency lending company found itself forced into Chapter 11 bankruptcy in the United States, with no one left to keep it afloat.
Regarding BlockFi’s request to reinstate withdrawals for affected users, the latter will have to wait for a hearing on January 9 aimed at deciding the matter. A second hearing is scheduled for January 13, this time regarding BlockFi International Ltdits subsidiary responsible for managing its business outside the United States, also in order to allow users to withdraw their cryptocurrencies.
At the moment, the number of creditors affected by BlockFi’s bankruptcy is estimated at around 100,000, for an uncertain amount currently valued between $1 billion and $10 billion.
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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