BlockFi Emerges from Bankruptcy, Enables User Withdrawals

BlockFi, the crypto lending platform, has successfully emerged from bankruptcy and is now facilitating withdrawals for both U.S. and international users, as announced on October 24. Nearly all Wallet customers can initiate withdrawal requests, while BlockFi Interest Account (BIA) and Loan customers can expect to access some of their assets early in 2024.

This development not only enables BlockFi to recover assets from firms it believes owe it money, including Three Arrows Capital (3AC) and FTX, but also allows for the continued distribution of assets to its creditors while processing claims.

For Wallet customers with assets on BlockFi, the process is as simple as logging into the app and submitting a withdrawal request. BIA and Loan customers will witness preparations for the initial distribution aligned with the bankruptcy plan, with the first distributions anticipated in early 2024. Subsequent distributions will follow, with the amount depending on BlockFi's success in FTX bankruptcy litigation and other factors.

BlockFi encountered liquidity issues in mid-2022 due to the collapse of Terra's stablecoin and was subsequently rescued by FTX, which later went bankrupt. A U.S. court's decision in August allowed BlockFi to repay U.S.-based Wallet customers, as part of a bankruptcy court-approved plan to wind down the company and repay creditors. Customer withdrawals were restricted at that time, but now international users can make withdrawals, as confirmed by an updated BlockFi Wallet withdrawal FAQ.