In a recent turn of events, BlockFi, a platform for lending cryptocurrency, revealed this week that it is enabling fund withdrawals for U.S. and foreign users from their BlockFi wallets, marking a significant advancement as the business emerges from bankruptcy.
BlockFi announced in a blog post on Monday that almost all Wallet customers can currently withdraw money from their accounts. This comes after the company’s reorganization plan was approved by a US bankruptcy court in August; however, withdrawals were prohibited at the time.
BlockFi filed for Chapter 11 bankruptcy protection on July 11, 2023, after being impacted by the collapse of crypto exchange FTX and hedge fund Three Arrows Capital.
However, BlockFi can now continue to distribute assets to creditors after its’ emergence from bankruptcy and also process claims. The company made it known that they can now take legal steps in the recovery of funds owed to them by third parties, including FTX and Three Arrows Capital.
Also, to initiate a withdrawal, BlockFi instructed wallet users’ to log in to the app and submit a request. The team will then process the withdrawals accordingly. Although loan customers and BlockFi Interest Accounts’ (BIA) distributions don’t seem to be available yet, the company expects initial payouts to begin in early 2024.
BlockFi CEO Zac Prince stated,
“With a clear path forward, we are eager to continue building a company our clients can believe in and serving clients who have placed their trust in BlockFi.”
The business noted that additional information regarding withdrawal availability will be released soon.
Although clients had to wait months to access their money again, the majority of BlockFi Wallet users being able to withdraw cryptocurrency today represents a significant breakthrough in the company’s recovery efforts. However, as BlockFi continues to recover from its bankruptcy filing, the period before creditors receive reimbursement is still very prolonged.
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