- BlockFi Loan and Interest Account customers can start withdrawing funds next year
- BlockFi can try to recover funds from its debtors, such as FTX and Three Arrows Capital
Crypto lender BlockFi has started repaying its creditors following its high-profile bankruptcy, from which it appears to be recovering, Cointelegraph reported, citing an October 24 blog post. According to the post, almost all Wallet users can start making withdrawals.
The platform adds that BlockFi Loan and Interest Account customers will be able to withdraw some funds starting early next year.
The platform can recover funds from debtors
BlockFi’s recovery from bankruptcy means it can try to recover funds from its debtors, such as FTX and Three Arrows Capital, which are also bankrupt. It can keep distributing assets to its creditors and processing claims.
The platform will process withdrawal requests after Wallet customers with funds log into the app and make such. Additional distributions of funds to Interest Account and Loan customers will be made throughout 2024. The amount of these funds will depend on BlockFi's success in FTX bankruptcy litigation, among other factors.
The painful background
BlockFi first ran into liquidity issues when the Terra ecosystem collapsed in 2022. In the middle of last year, the lender secured a $250 million revolving credit facility from FTX, as Bankless Times reported. A few months later, FTX declared insolvency, seemingly taking BlockFi down with it.
In May this year, it emerged that BlockFi had exchanged those digital assets for fiat at rock bottom rates. Among other poor management decisions, they deposited $10 million into Silicon Valley Bank, which went bankrupt too. No one secured collateral in case of bank failure.
Not a victim
According to BlockFi’s creditors, the platform was not a victim of FTX and Alameda Research, contrary to its claims.
BlockFi went down not only due to bad management, but also because of the lender’s restructuring agents’ poor decisions.
Contributors
