BlockFi Seeks Permission to Allow Some Users to Withdraw Assets

BlockFi sought permission from the US Bankruptcy Court to allow its customers to obtain their crypto holdings (locked in BlockFi Wallets due to the firm’s problems).

The firm paused withdrawals on November 11, the same day FTX and Alameda Research filed for Chapter 11 Proceedings in the United States. 

• It goes without saying that BlockFi has been amongst the worst-affected companies throughout the ongoing bear market.
• It laid off around 20% of its total headcount in June, highlighting the financial challenges it was facing.
• FTX stepped up, giving BlockFi a revolving credit worth $250 million. Shortly after, SBF’s former crypto giant was rumored to be close to acquiring the platform for $25 million. 
• However, as FTX was also sent into bankruptcy later in the year, BlockFi’s condition didn’t get any better. The platform halted customer withdrawals and filed for bankruptcy protection.
• In a recent motion, the crypto lender sought permission to allow users to withdraw their crypto possessions from the BlockFi Wallets.
• The company described the move as an “important step toward our goal of returning assets to clients.”

“It is our belief that clients unambiguously own the digital assets in their BlockFi Wallet Accounts. As such, we filed a motion requesting authority from the US Bankruptcy Court to allow clients to withdraw their digital assets that are held in their BlockFi Wallet Accounts.

We will be seeking similar relief from the Supreme Court of Bermuda with respect to BlockFi Wallet Accounts held at BlockFi International Ltd,” a letter sent to affected individuals reads.