Kenne Michael 
During a hearing held on September 26, the court’s decision represents a significant milestone in the company’s winding-down process.
It potentially enables customers to recover a portion of their investments by year-end.
During the same hearing, Bankruptcy Judge Michael A. Kaplan approved the company’s third amended Chapter 11 plan.
This plan, which has the support of a committee representing customer interests and accommodating creditors, clears the path for certain BlockFi creditors to receive partial repayment in cryptocurrencies such as Bitcoin or Ethereum, as outlined in court documents.
As detailed in an August court filing, unsecured BlockFi creditors can anticipate a recovery ranging from approximately 35% to 63% of their owed amounts.
The final payout is contingent on resolving BlockFi’s legal disputes with FTX and other crypto firms that have filed for bankruptcy.
BlockFi has indicated that settling these disputes with FTX and Three Arrows Capital could significantly impact creditor recoveries, potentially increasing them by as much as $1 billion.
A court filing dated September 25 pointed out that the settlement likely reduced additional administrative fees and expenses, thus preserving the overall recoveries for creditors.
The committee expressed optimism regarding the commencement of BlockFi’s customer repayment plan this year.
BlockFi initially suspended customer withdrawals on November 10, just before FTX declared bankruptcy.
However, earlier this year, BlockFi determined that liquidation was the most suitable approach for repaying its customers after initially aiming to restructure the business under Chapter 11.
