At the end of November, crypto lending company BlockFi filed for bankruptcy. Today, the bankrupt crypto company announced via email that it has filed a petition with the bankruptcy court to make users’ assets available.
There will be a lending hearing for US customers on January 9, the rest of the world will be discussed on January 13.
User’s own encryption
The email begins by stating that customers, not BlockFi, own the digital assets in their accounts:
“Today we took an important step toward our goal of returning assets to clients through our Chapter 11 cases. We believe that customers clearly own the digital assets in their BlockFi wallet accounts. For this reason, we have petitioned the US Bankruptcy Court for approval to allow customers to withdraw digital assets into their BlockFi wallet accounts.”
Hence, the bankrupt crypto lending platform has petitioned a US bankruptcy court to allow users to withdraw digital assets. This application was submitted yesterday, December 19.
Since November 10, customers no longer have access to their coins, they are frozen, so to speak. Now BlockFi wants the court to still allow users to access their funds.
The court documents also ask for permission to update the user interface to properly reflect transactions from the platform’s interruption.
wallet and savings
According to BlockFi, this request will not affect withdrawals or transfers from BlockFi interest accounts, which currently remain suspended. A BlockFi user has two accounts, one is basically just a wallet and the other is a savings account where you earn interest on your cryptocurrency.
hearing on January 13
The email also states that they plan to file a similar claim with the Supreme Court of Bermuda regarding BlockFi wallet accounts with BlockFi International Ltd.
BlockFi International is a subsidiary of the Bermuda-based company, which is extra important for us Dutch people because all activities outside the US are carried out from here. According to court documents, a hearing will be held on January 13.
The Americans are a little earlier and the hearing is scheduled for January 9.
Bankruptcy after inevitable FTX
In mid-November, BlockFi shared an update on its official Twitter account to indicate that it was temporarily suspending its services. This was in response to the fall in FTX. BlockFi had no funds with this exchange, but was “financially dependent”. This forced the company to suspend services.
This included limiting platform activity and pausing customer recordings. He also urged users not to deposit funds into their wallets or savings accounts, but did not specifically say that deposits would be disabled.
In hindsight, it was inevitable: On November 28, BlockFi announced that it had filed for bankruptcy. This is called Chapter 11 in the US.
A Chapter 11 bankruptcy proceeding stops all civil litigation and allows companies to create a recovery plan while continuing to operate. So it is not like in the Netherlands, where bankruptcy means the end or a new beginning; It is a way to financially restructure the company.
Several large crypto companies also went bankrupt in May, including loan company Celsius. Celsius also submitted to Chapter 11. The big difference between the two companies is that BlockFi seems to work much faster.
Source: Btc Direct
Source link
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
