BlockFi Emerges from Bankruptcy Ahead of Schedule

In addition to the success of its bankruptcy plan, the beleaguered cryptocurrency lending platform BlockFi, which was forced to halt withdrawals when FTX failed, has announced its earlier than anticipated emergence from bankruptcy, effective immediately.

Following this juncture, the crypto company, which was affected by the contagion caused by FTX’s demise, can legally implement all of the strategies detailed in its reorganization plan.

Priority number one is reimbursing its creditors and all those affected by the suspension of BlockFi operations, following the parameters of the plan.

Over the past eleven months, BlockFi’s management, advisors, and other stakeholders have worked assiduously to reach this important milestone.

According to the official BlockFi announcement, “we are proud to say that BlockFi reached its effective date more quickly and efficiently than many other retail crypto companies.”

In addition, BlockFi is now free to pursue the recovery of all assets and liabilities owed to the company by entities such as Three Arrows Capital (3AC), FTX, and others.

The extent of client recoveries is extremely dependent on BlockFi’s litigation success. Notably, a financial document uploaded in error at the beginning of this year revealed that BlockFi has more than $1.2 billion associated with SBF’s FTX and Alameda Research.

The cryptocurrency lender will continue to distribute digital assets to clients, including those with a BlockFi Interest Account (BIA).

Simultaneously, the process of reconciling client claims will continue uninterrupted. This is to ensure that every claim includes both asset class and amount information.

Ensuring that all clients receive fair and equitable distributions of remaining and recovered assets is another reason. The bankruptcy judge has already authorized the return of up to $300 million to BlockFi custody wallet owners.

To date, withdrawals and account access have been restored for the vast majority of wallet users. A client needs to log in to BlockFi.com and submit a withdrawal request to initiate a withdrawal.

BaIn contrast, BIA holders and retail loan customers are anticipated to receive an email in the coming months, prompting them to withdraw their funds based on the plan-approved recovery amounts.