BlockFi, the cryptocurrency lending firm that halted withdrawals amid the collapse of the FTX exchange last year, has officially emerged from bankruptcy. Announced on Tuesday, this marks a significant milestone for the company, which has worked assiduously for the past 11 months to reach this stage. According to a blog post, BlockFi credits its swift and efficient exit from bankruptcy to its dedicated management, advisors, and stakeholders.
Moreover, BlockFi now aims to commence a planned wind-down to recover assets from companies like FTX and Three Arrows Capital. It has already begun distributing digital assets back to clients. Hence, withdrawals have been made accessible to nearly all wallet customers.
Digital asset distribution underway
The firm further clarified its next steps in the blog post. According to the firm’s statement, users with interest-yielding accounts on BlockFi can expect emails in the upcoming months for them to be able to withdraw available funds. This move is the first in a series of asset distributions planned by the company.
The firm added: “The company expects that this will be the first wave of distributions, which will be followed by additional distributions. The amount of subsequent distributions is subject to many factors, but primarily BlockFi’s treatment in the FTX bankruptcy cases.”
Additionally, BlockFi is also continuing its claims reconciliation process. The aim is to ensure that client claims are represented accurately in asset class and amount. This will help to ensure that clients receive fair and equitable distributions of the remaining and recovered assets. Most wallet customers are currently able to submit withdrawal requests, which significantly improves the liquidation process for users who have been awaiting access to their funds.
Further updates regarding the initial distribution timing will be communicated in the coming months. The company is targeting to begin these distributions in early 2024.
BlockFi has been navigating through the legal intricacies of bankruptcy since late September, when its Chapter 11 plan was confirmed. The company had been awaiting a hearing to finalize its emergence from bankruptcy. The plan had the backing of both the company’s management and the Committee of Unsecured Creditors, receiving a 90% approval rate across all voting classes.
This latest development marks a critical point in BlockFi’s journey, positioning the company to rectify its previous financial woes and make amends to its creditors.
