A Friday email from BlockFi to its creditors reveals that the firm’s creditors have approved its bankruptcy reorganization plan, removing one of the last obstacles in a months-long process to close down the business and pay its clients.
After FTX blew up last autumn, a rash of digital asset companies, including the troubled crypto lender, froze the accounts of their customers before going out of business. BlockFi will be able to recoup the assets it lost to collapsed hedge fund Three Arrows Capital and cryptocurrency exchange FTX thanks to the restructuring plan, which was approved by more than 90% of creditors, the lender said. This will allow the lender to increase the amount of money going to creditors.
According to the notice given to creditors, “Success in this [process] could increase client recoveries, depending on the product and jurisdiction.”
To make the scheme official, a bankruptcy judge must approve it, according to BlockFi’s email. The corporation will then be free to distribute the associated funds to its creditors after it has been approved.
According to the business, customers who have money in BlockFi Interest Accounts or BlockFi Retail Loans should receive their money returned in the coming months. Additionally, the business announced it would keep giving money to BlockFi Wallet users.