BlockFi, a cryptocurrency lender, has requested a U.S. Bankruptcy Court to allow consumers to receive their BlockFi Wallets' cryptocurrency back.
The proposal
BlockFi, a defunct cryptocurrency lending platform, has submitted a motion asking the United States Bankruptcy Court to permit its users to withdraw digital assets now kept in BlockFi Wallets. The lender requested permission from the bankruptcy court to recognize customer withdrawals from wallet accounts as of the platform's stop on November 10 in a move submitted on December 19 (1) to the U.S. Bankruptcy Court for the District of New Jersey. Additionally, approval is sought in the court proceedings to update the user interface to display transactions following the platform's stop accurately.
A BlockFi described the move as an essential step toward our aim of restoring funds to customers through chapter 11 proceedings in a widely circulated email sent to impacted users. We think that customers own the digital assets stored in their BlockFi Wallet Accounts. BlockFi claims that this action won't impact transfers or withdrawals from BlockFi Interest Accounts, which are currently suspended.
Current Plans and prospects
The lending platform also stated that it intends to ask Bermuda's Supreme Court for an "equivalent remedy about BlockFi Wallet Accounts held at BlockFi International Ltd." The business, with its non-U.S. operations, is located in Bermuda, and BlockFi International is a division of that business. Crypto blogger Tiffany Fong shared the message from BlockFi with her on December 19, adding commentary. The troubled company seems to be moving considerably more quickly than Celsius, which declared bankruptcy more than five months earlier in July, contrasted with BlockFi's bankruptcy in November. According to court records, a hearing to determine whether the request will be granted is planned for January 9, 2023.
WOW, @BlockFi has already filed a motion requesting client withdrawals for assets held in BlockFi Wallet Accounts. S/O to BlockFi for moving exponentially more quickly than @CelsiusNetwork in Ch 11. pic.twitter.com/JvtWzMklNA
— Tiffany Fong (@TiffanyFong_) December 20, 2022
On January 13, 2023, the Supreme Court of Bermuda will hear a separate case involving wallet accounts stored at BlockFi International Ltd. On November 11, BlockFi advised that customers refrain from depositing funds into BlockFi wallets or Interest Accounts and froze client withdrawals, citing a lack of clarity surrounding FTX. By November 28, BlockFi submitted a Chapter 11 bankruptcy (2) petition to the District of New Jersey of the United States Court for the corporate entity and its eight affiliates. On the same day, BlockFi International filed for bankruptcy with the Supreme Court of Bermuda.
