On Tuesday, crypto lending firm BlockFi announced its official emergence from bankruptcy, paving the way to start repaying its creditors.
BlockFi Sets Stage for Creditor Repayment
Following a challenging period due to the FTX exchange downfall, crypto lending firm BlockFi declared on Tuesday its official emergence from bankruptcy. This pivotal transition enables the company to commence its repayment to creditors.
In a recent blog post, the company highlighted the collective efforts of its management, advisors, and stakeholders over the last 11 months to achieve this significant juncture. The company’s swift and efficient journey to this point stands out, especially when compared to several other retail cryptocurrency firms.
Beginning of Asset Recovery
Following months of meticulous bankruptcy planning, BlockFi is set to initiate its deliberate wind-down process. A crucial part of this strategy involves the recovery of assets from firms like FTX and Three Arrows Capital. In an effort to restore client trust, BlockFi has already resumed digital asset distributions to a majority of its Wallet customers.
In the near future, BlockFi account holders with interest-earning capabilities will be alerted via email about the option to withdraw their available funds. This marks just the initial phase of the company’s restitution plan. Subsequent distributions are anticipated; however, their scale largely hinges on BlockFi’s position in the ongoing FTX bankruptcy proceedings.
Post-Emergence Actions Outlined
In the wake of its recent emergence from bankruptcy, BlockFi has shared a comprehensive plan detailing its forward course. These steps aim to restore client confidence and ensure the equitable distribution of assets.
One of BlockFi’s primary goals is to reclaim assets they believe are owed to them by several companies, notably including FTX and 3AC. Their success in these endeavors could enhance the financial restitution available to clients.
The company emphasizes its dedication to returning digital assets to its clientele. Those holding BlockFi Interest Accounts (BIA) are a focus, as they form a significant part of the user base. Simultaneously, BlockFi aims to ensure all claims are meticulously processed to ascertain the precise asset class and sum, confirming fair distributions.
Timeline for Asset Return
Clients using the BlockFi Wallet feature can already proceed with withdrawal requests. However, those with BIA and Loan accounts will need a tad more patience. BlockFi has begun its planned wind-down and is preparing for an initial asset distribution from its consolidated estate.
Preliminary distributions are slated for early 2024, with the exact timeline and subsequent distributions largely contingent on recoveries, notably from FTX and affiliated entities.
For clients affiliated with BIAs and Retail Loans, BlockFi will roll out communication in the coming months, guiding them on how to withdraw their sanctioned recovery amounts. This initiative marks the beginning of a phased distribution plan.
On the other hand, those who have funds in the BlockFi Wallet are urged to initiate their withdrawal requests at the earliest, ensuring they complete these transactions before the closing window on December 31, 2023, at 11:59 PM UTC.
Once this window has concluded, the company will turn its attention to BIA and Retail Loan holders, facilitating withdrawals from the initial distribution of the estate’s funds.