BlockFi Emerges from Bankruptcy and Opens Withdrawals for Global Users

BlockFi has revealed that withdrawal requests are now open for both domestic and global users. On October 24, a blog post confirmed that BlockFi, a crypto lending entity, has successfully navigated its way out of bankruptcy and is poised to repay some of its debtors. The post clarified that most Wallet clients can presently withdraw their funds, with BlockFi Interest Account (BIA) and Loan customers anticipated to gain similar access in early 2024.

Emerging from bankruptcy positions BlockFi to reclaim assets from businesses it deems in debt to them, such as bankrupt crypto entities like Three Arrows Capital (“3AC”) and FTX. Additionally, this progress allows the firm to keep disbursing funds to its creditors and to manage claims.

Wallet users holding assets on BlockFi have been advised to use the app for withdrawal requests, enabling the company to facilitate these withdrawals. Meanwhile, the BIA and Loan clientele can expect preliminary distributions in line with the bankruptcy plan, with the first phase planned for early 2024. However, subsequent distribution amounts hinge on outcomes from BlockFi’s FTX bankruptcy legal battles, among other considerations.

Previously, BlockFi faced financial hurdles in 2022 due to the Terra stablecoin’s downfall. FTX extended a lifeline with a $400 million credit offer, but unfortunately, FTX itself declared bankruptcy in November, dragging BlockFi along. On August 17, a U.S. court gave a green light for BlockFi to begin repayments to its U.S. Wallet users, following the bankruptcy court’s approval of a company liquidation and repayment strategy. Although the August verdict didn’t permit immediate U.S. withdrawals, a recent update on the BlockFi Wallet withdrawal FAQ page now includes information for international users to withdraw.

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