BlockFi has submitted a request to release the frozen cryptocurrency back to the wallet users
December 20, 2022
BlockFi, a bankrupt cryptocurrency lending platform, has asked a bankruptcy court in the US for permission to allow its users to retrieve digital assets that are currently inaccessible in BlockFi wallets.
On December 19, the lender requested permission from the U.S. Bankruptcy Court in the District of New Jersey to allow clients to withdraw money from their wallet accounts, which have been inaccessible since November 10 due to the significant impact on them as a result of FTX’s demise.
The court documents are requesting approval to update the user interface to accurately display transactions that occurred during the pause of the platform.
BlockFi sent an email to affected users stating that the motion to file for Chapter 11 bankruptcy is a necessary step towards returning assets to clients through the bankruptcy process. They emphasized that this action is part of their goal to return assets to client’s.
BlockFi has stated that the current action will not affect the withdrawal or transfer of funds from BlockFi Interest Accounts, which are currently paused.
The lending platform has indicated that it plans to ask the Supreme Court of Bermuda for similar assistance concerning BlockFi Wallet Accounts managed by BlockFi International Ltd.
BlockFi International is a company that operates outside the U.S. and is a subsidiary of a Bermuda-based company.
Tiffany Fong, a cryptocurrency blogger, recently shared a message from BlockFi which she received on December 19th. She noted that the company, which declared bankruptcy in November, seems to be moving at a faster pace compared to Celsius, which filed for bankruptcy five months ago.
The court documents state that a hearing to determine if the motion will be approved is scheduled for January 9th.
The Supreme Court of Bermuda will hold a hearing on January 13th specifically regarding the wallet accounts at BlockFi International Ltd.
On Nov. 11, BlockFi stopped clients from withdrawing their funds and asked them not to deposit any more money into their BlockFi wallets or Interest Accounts due to concerns about FTX.
On November 28th, BlockFi and its eight subsidiaries filed for Chapter 11 bankruptcy, while BlockFi International filed for bankruptcy with the Supreme Court of Bermuda.