Crypto Lender BlockFi Emerges from Bankruptcy, Promises Repayment by 2024

By: Isha Das

The cryptocurrency lending platform, BlockFi, has successfully emerged from its financial troubles, following a declaration of bankruptcy in November 2022. As part of its recovery plan, the company has floated measures that include a wind-down and allocations to creditors and former customers.

As of October 24, BlockFi made it possible for customers to submit withdrawal requests and intends to keep this service active until December 31. The company also announced that they intend to begin repayments to additional customers, specifically BlockFi Interest Account (BIA) and Retail Loan customers, in early 2024. Notably, financial assets used for these repayments will be obtained from BlockFi's wind-down process.

BlockFi plans to actively engage in legal action against FTX and Three Arrow Capital, among others, to recover its alleged dues. The results from these legal proceedings might enhance the repatriation of funds to its creditors and former customers. BlockFi had initially halted withdrawals and launched bankruptcy proceedings due to troubles within the FTX empire, which also faced its own bankruptcy.

At the time of its bankruptcy filings, reports suggest that BlockFi owed roughly $10 billion to at least 100,000 creditors and former customers. Further distribution and repayment updates from BlockFi are expected in the near future.