Blockfi Gets Closer to Refunding Creditors
BlockFi's bankruptcy plan moves forward, aiming to speed up repayment to customers.
BlockFi, a crypto firm, got conditional approval from a U.S. bankruptcy court in New Jersey for its bankruptcy plan. The company has asked those eligible to vote in favor of the plan before September 11. If approved, this will speed up the return of customer funds.
The company filed for bankruptcy protection (Chapter 11) in November 2022 due to instability in the crypto markets and its links to the failed crypto exchange FTX.BlockFi's aim is to get as much money back for its creditors as possible, and the approval of the plan is a step towards that.
If the plan is approved, BlockFi will work to recover money from other bankrupt companies, like Alameda Research, FTX, and Three Arrows Capital. But these companies' administrators and liquidators don't agree with BlockFi's plan, saying it lowers their claims.
BlockFi said it would give up all rights and actions against its customers, but only if they agree to the bankruptcy plan's offer. This only excludes those who took out $250,000 or more from their BlockFi accounts after November 2, 2022.
Customers who moved less than $250,000 from their accounts or withdrew less than this amount before November 10, 2022, won't have to return any funds. Those who are claiming less than $3,000 will receive half their claims in cash.
