After a court order from a US bankruptcy court, numerous customers of the defunct cryptocurrency lending company BlockFi have reported successful withdrawals of their funds, marking the first time in several months that they have been able to access their assets.
On August 17, BlockFi announced through a statement on X (formerly Twitter) that it had commenced withdrawals to wallets belonging to eligible users within the United States, in accordance with the bankruptcy court's order. However, this opportunity was not extended to many wallets controlled by international users, as legal proceedings involving these accounts are ongoing.
The withdrawal option is currently open to US BlockFi e-Wallet account holders who meet specific criteria outlined by the court order. This includes restrictions such as not having withdrawn or transferred digital assets exceeding a value of $7,575 from their BlockFi Interest Account (BIA) or BlockFi Private Client (BPC) wallets, among other conditions.
BlockFi, along with other entities like FTX, Celsius Network, and Voyager Digital, filed for Chapter 11 bankruptcy in 2022. BlockFi had halted customer withdrawals in November of that year but sought to return user funds by filing a motion in December. Following a court order issued on August 16 by a US bankruptcy court in New Jersey, BlockFi gained the legal authority to allow withdrawals after a nine-month suspension. While many users within the US have reportedly accessed their funds, some international users are still awaiting ting eligibility.
The bankruptcy court conditionally approved BlockFi's restructuring plan on August 2, revealing intentions to prioritize fund recovery from entities such as Alameda Research, FTX, Three Arrows Capital, Emergent, and Core Scientific. BlockFi also faces a $30 million fine from the US Securities and Exchange Commission, which has decided to delay the collection of the fine until the platform's users are fully repaid.
