Crypto Lender BlockFi Begins Shutdown, Asks Clients to Submit Withdrawal Request

Nearly 11 months after it first declared bankruptcy, the crypto lender BlockFi has now officially begun the process of winding down its operations. In line with this, the company has asked its wallet users to tender their withdrawal requests on its website to claim their funds. However, there is a December 31 deadline for the requests.

In the October 24 announcement, BlockFi revealed that it has emerged from bankruptcy court, having received approval for its reorganization plan from all relevant stakeholders.

However, part of its plans may also involve getting additional payments from companies that reportedly owe it too. Recall that BlockFi secured approval for its bankruptcy plan in September that would see it recover assets from other bankrupt crypto companies such as FTX exchange and now-defunct crypto hedge fund Three Arrows Capital (3AC). So, there is a fair chance that client recoveries may increase, BlockFi said on Tuesday.

By BlockFi’s estimates, customers who had interest-bearing Earn accounts should expect to see between 39.4% and 100% of the value they had in their accounts. Although it confirmed that the returns will be facilitated over the coming months, BlockFi also explained that the amounts that clients receive will largely depend on the amount they can get from FTX’s bankruptcy.

Crypto Lender BlockFi to Wind Down, but There Might Be Hope for Creditors

As Coinspeaker earlier reported, BlockFi filed for bankruptcy last November. At the time, it blamed its loan to FTX’s sister firm Alameda as one of the main reasons for its downfall.

However, all hope may not be lost for BlockFi’s creditors. As of publication, Bitcoin (BTC) has gained 18.8% in the last 7 days, to be trading at $33,900.88. That is according to CoinMarketCap data. And, though the gains may be linked to the growing optimism that a spot Bitcoin ETF may soon be approved, many creditors that have been impacted by bankruptcies in the crypto industry would relish the ongoing rally.

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2023-10-25 15:27