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BlockFi Moves To Refund Frozen Crypto To Users

BlockFi Moves:

BlockFi, a cryptocurrency lender, has requested a U.S. Bankruptcy Court to allow users to receive their BlockFi Wallets’ cryptocurrency back.

BlockFi, a defunct cryptocurrency lending platform, has submitted a motion asking the United States Bankruptcy Court to permit its users to withdraw digital assets now kept in BlockFi Wallets.

The lender requested permission from the bankruptcy court to recognise client withdrawals from wallet accounts as of the platform’s stop on November 10 in a move submitted on December 19 to the U.S. Bankruptcy Court for the District of New Jersey.

Additionally, approval is sought in the court proceedings to update the user interface to display transactions following the platform’s stop accurately.

BlockFi described the move as “an essential step toward our aim of restoring assets to clients through our chapter 11 proceedings” in a widely circulated email sent to affected users.

Customers own the digital assets stored in their BlockFi Wallet Accounts.
BlockFi claims that this action won’t impact transfers or withdrawals from BlockFi Interest Accounts, which are currently paused.

BlockFi’s Bankruptcy:

The lending platform also stated that it intends to ask Bermuda’s Supreme Court for an “equivalent remedy concerning BlockFi Wallet Accounts held at BlockFi International Ltd.”

The business with its non-U.S. operations is based in Bermuda, and BlockFi International is a division of that business.

Crypto writer Tiffany Fong posted the message BlockFi emailed her on December 19, noting that the troubled company seemed to be moving much more quickly than Celsius, which declared bankruptcy over five months earlier in July instead of BlockFi’s bankruptcy filing in November.

According to court records, a hearing to determine whether the motion will be granted is planned for January 9, 2023.

On January 13, 2023, the Supreme Court of Bermuda will hear a separate case involving wallet accounts stored at BlockFi International Ltd.

On November 11, BlockFi advised that customers refrain from depositing funds into BlockFi wallets or Interest Accounts and froze client withdrawals, citing a lack of clarity surrounding FTX.

BlockFi filed for Chapter 11 bankruptcy on November 28 in the United States Bankruptcy Court for the District of New Jersey for the company and its eight subsidiaries. On the same day, BlockFi International filed for bankruptcy with the Supreme Court of Bermuda.

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