Cryptocurrency lending platform BlockFi announced that it has officially emerged from Chapter 11 bankruptcy.
According to the details from the announcement, the company can now begin executing its court-approved reorganization plan to repay creditors and customers. BlockFi aims to recover from insolvency brought on by exposure to failed exchange FTX and hedge fund Three Arrows Capital.
BlockFi purchased FTX stablecoin worth hundreds of millions before FTX’s collapse and subsequent bankruptcy in November 2022. The unraveling of Sam Bankman-Fried’s empire tipped BlockFi into insolvency as well. The crypto lender joined other crypto lenders like Celsius Network and Voyager Digital which filed for bankruptcy last year amid industry contagion.
BlockFi can now implement a bankruptcy plan
According to an official blog post, the company can now take the following steps detailed in its approved plan:
It can attempt to recover assets owed by FTX, Three Arrows Capital, and other bankrupt entities. It can continue the distribution of digital assets back to clients and BIA account holders. Additionally, they can keep reconciling client claims to ensure accurate asset distributions.
The process of fully resuming normal operations remains ongoing. Once restructuring concludes, the crypto lender aims to continue crypto lending activities with stronger risk management practices.
But exiting bankruptcy represents an important step forward for BlockFi after months of uncertainty. Effective execution of its court-approved plans in the coming months will determine if BlockFi can bounce back as a viable business.