By
Chimamanda U. Martha
April 19th, 2024
BlockFi intends to delete all “attempted” withdrawals after the platform pause from the user interface to sort out any confusion.
Crypto lender BlockFi, which filed for bankruptcy on the 28th of November, has filed a motion with a US court to resume withdrawals for customers with crypto locked in its wallet accounts. The bankrupt company filed the motion on the 19th of December with the US Bankruptcy Court in the District of New Jersey. If approved, BlockFi users will be able to withdraw the crypto that is locked up in the platform. The motion says that cryptos held in BlockFi wallets belong to customers, and the company does not have legal or equitable interest in friends from when it stopped operation on the 10th of November.
In addition to allowing withdrawals of funds in customers’ BlockFi wallets, the crypto lender is pushing to update the user interface to reflect transactions correctly. The company also seeks to conduct ordinary course reconciliation of accounts.
“Simply put, the [clients] were unable to, and did not, effectuate any transaction on the BlockFi platform beginning the moment of the Platform Pause Time Stamp.”
BlockFi Pushes for Withdrawals of Certain Customers
BlockFi intends to delete all “attempted” withdrawals after the platform pause from the user interface to sort out any confusion. The company also said in the filing that “for the avoidance of doubt, the Debtors do not seek to reverse any client deposits from outside the platform to Wallet Accounts which were received following the Platform Pause Time Stamp.
As shared on Twitter, BlockFi sent an email to users, announcing the latest filing with the court. It added that it believes that clients unambiguously own the digital assets in their BlockFi Wallet Accounts. The crypto lender added:
“We will be seeking similar relief from the Supreme Court of Bermuda with respect to BlockFi Wallet Accounts held at BlockFi International Ltd. This motion does not impact withdrawals or transfers from BlockFi Interest Accounts, which remain paused at this time.”
BlockFi was one of the first victims of the crash trend led by crypto exchange FTX in early November. The crypto lender brokered a $680 million deal with FTX.US and hence was impacted with FTX’s financial health escalated. BlockFi’s bankruptcy petition showed that the company claimed over 100,000 creditors and between $1 billion and $10 billion in assets and liabilities.
Celsius Network, which also filed for bankruptcy, submitted a similar motion as it restructured. The company provided a status update on the 8th of December, saying that the court has authorized it to return “pure custody accounts” that were never in Celsius’ earn or borrow programs.