During the early days of the latest crypto winter, BlockFi was one of the first major platforms to go bust following the collapse of TerraUSD.
At the time, a shaky BlockFi was “rescued” by FTX, who offered the beleaguered crypto company a $400 million line of credit to keep it from collapsing. However, this solution was short-lived, as FTX, in turn, crumbled a few months later under the weight of its founders’ bad decisions and their “creative” accounting practices.
Now, 11 months after going bust, BlockFi has announced that it has exited bankruptcy procedures and is entering its reimbursement and wind-down plan.
BlockFi is pleased to announce that its bankruptcy plan (the “Plan”) is effective and the company has emerged from bankruptcy as of October 24, 2023 (the “Effective Date”).
— BlockFi (@BlockFi) October 24, 2023
Withdrawals for Nearly All Users
Certain BlockFi users were able to withdraw some of their funds as far back as May 2023 after the New Jersey bankruptcy court approved the order. Unfortunately, users of the platform who were not based in the United States were unable to withdraw anything until BlockFi’s bankruptcy plan was approved.
After getting the green light from the court about a month ago, things were set in motion at BlockFi regarding the repayment of international wallet users.
An update has since been added to BlockFi’s Withdrawal FAQ, stating that international users with Wallet accounts are also eligible for withdrawals, effective immediately.
Updates for BIA and Loan Accounts Coming Soon
While BlockFi wallet holders may be content with the outcome of the situation, the owners of Loan and BlockFi Interest Accounts (BIA) will have to wait a bit longer to see their funds returned.
The owners of these accounts will receive e-mails sometime in the coming months prompting them to withdraw a percentage of their funds, as made available by BlockFi’s recovery process.
Further amounts may follow, depending on the success in court of BlockFi’s estate.
The company itself will continue to pursue claims against FTX, 3AC, and others in a bid to recoup as much as possible for BIA holders before finally winding down operations.
The platform has since posted about its “success” on X, noting its resolution of bankruptcy came faster than that of its peer platforms in similar situations.
“BlockFi’s management, advisors, and other stakeholders worked diligently over the past 11 months to reach this critical milestone. We are proud to say that BlockFi reached its Effective Date more quickly and efficiently than many other retail crypto companies.”