The bankrupt crypto lender assured users that its Plan Administrator and Joint Liquidators are working with the relevant authorities to ensure the smooth distribution of assets for international customers.
BlockFi’s became one of the first victims of the collapse of the Sam Bankman-Fried’s FTX exchange in November 2022.
BlockFi exited bankruptcy in 2023 and has begun a post-bankruptcy wind-down. The defunct crypto lender closed down its web platform in May 2024.
Despite the surge in legal fees from cryptocurrency bankruptcy cases filed in 2022, the demand for bankruptcy lawyers in the crypto economy has grown significantly.
The deadline for most BlockFi customers to withdraw their crypto holdings was April 28, 2024. But the company is now offering a way for those who missed the first chance.
With the settlement now approved, BlockFi can proceed with the distribution of assets from the lending estate to its creditors, the primary reason for seeking expedited approval.
The court filing contends that the government’s handling of cryptocurrencies creates an inconsistency and contradiction between the second count of commodities fraud and the first count of securities fraud.
BlockFi revealed that it has emerged from bankruptcy court, having received approval for its reorganization plan from all relevant stakeholders.
BlockFi determined earlier this year that liquidation was the best choice for compensating customers after extensive consideration.
3AC stated that BlockFi’s efforts to downsize its claims might infringe upon the bankruptcy protection it received through Chapter 15.
BlockFi’s eligible creditors can expect to receive a comprehensive Solicitation Package containing all the essential information for voting on the plan.
The announcement comes at a time when crypto loans are increasing in popularity owing, in large part, to the overall growth of the digital lending market.
Kirkland & Ellis is currently the legal representative of many crypto exchanges that are faced with bankruptcy.
Instead of accepting or acknowledging the license return, the commission insists that BlockFi undergo administrative proceedings. The bankrupt crypto exchange was left with no option but to sue Jorge Perez, the Connecticut banking commissioner.
A judge has approved repayment for BlockFi custodial wallet holders but said interest-bearing funds still belong to the bankrupt company.