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US crypto lender BlockFi may reopen withdrawals soon after filing for bankruptcy

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BlockFi Inc

– US cryptocurrency lender BlockFi Inc. may allow its clients to withdraw their assets soon according to the first hearing on Tuesday, a day after its voluntary bankruptcy announcement.

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A motion could be filed quickly to allow BlockFi customers to make withdrawals from their personal wallets, according to Joshua Sussberg, a Kirkland & Ellis attorney representing BlockFi.

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“We want to make sure that people get as much of their value back as quickly as possible,” Sussberg said.

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BlockFi has strong regulatory oversight, corporate controls and risk management, according to Sussberg.

BlockFi and eight of its affiliates filed voluntary cases under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey on Monday to stabilize their business and consummate a restructuring transaction. solution that maximizes value for all customers and other stakeholders, BlockFi announced Monday.

BlockFi suspended client withdrawals on November 11 following the bankruptcy of cryptocurrency derivatives exchange FTX.com and its affiliates on the same day.

The crypto lender said it would focus on recovering all obligations owed to it by its counterparties, including FTX and associated corporate entities.

BlockFi provided US$671 million worth of loans to FTX’s trading arm, Alameda Research Limited, and has US$355 million worth of digital assets frozen on the FTX platform, according to Sussberg.

BlockFi has more than 100,000 creditors with estimated assets and liabilities of between US$1 billion and US$10 billion, according to BlockFi.

Headquartered in Jersey City, New Jersey, BlockFi was created in 2017 to provide credit services to markets with limited access to simple financial products. ■

(Xinhua)

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