Bankrupt Crypto Lender BlockFi Files Motion To Return Client Assets

Lavina Daryanani
Source: CryptoSlate

BlockFi recently filed a motion requesting power from the US Bankruptcy Court to allow its users to withdraw digital assets locked up in wallet accounts on the platform. The bankrupt crypto lending platform also asked for permission to update its user interface to duly reflect transactions as of the platform’s halt.

A host of users shared the e-mails they received from BlockFi on social media platforms like Twitter. Notably, the firm labeled the motion an “important step” towards its goal of returning assets to clients via its chapter 11 cases. The mail further asserted,

It is our belief that clients unambiguously own the digital assets in their BlockFi Wallet Accounts.

Also Read: BlockFi sues Sam Bankman-Fried over $575M Robinhood Shares

Motion Doesn’t Impact Interest A/c Transfers

BlockFi added that it will seek similar relief from the Supreme Court of Bermuda with respect to wallet accounts held at BlockFi International Ltd. as well. BlockFi International, on its part, is a subsidiary of the company based in Bermuda. It runs the platform’s non-US operations.

BlockFi further clarified,

“This motion does not impact withdrawals or transfers from BlockFi Interest Accounts, which remain paused at this time.”

Towards the end of last month, crypto lender BlockFi and eight of its affiliates officially filed for Chapter 11 bankruptcy protection. The said measure was adopted in the hope to salvage its business via court proceedings.

Furthermore, as per the bankruptcy filing details, the troubled crypto lender has more than 100,000 creditors. The details also revealed that its liabilities ranged from $1 billion to $10 billion.

Read More: BlockFi Liabilities are in $1B to $10B Range, Bankruptcy Filing Unveils

A hearing to decide whether or not the latest motion will be granted is slated for January 9, 2023. Parallelly, a separate hearing pertaining to wallet accounts held at BlockFi International Ltd. will be heard by the Supreme Court of Bermuda on January 13, 2023.