BlockFi Says It’s Taken Major Step Toward Emerging From Bankruptcy

BlockFi’s creditors have approved its bankruptcy restructuring plan, clearing one of the final hurdles in a months-long process to wind down the firm’s business and reimburse its clients, a Friday email from BlockFi to its creditors shows.

The beleaguered crypto lender was among a rash of digital asset companies that froze their customers’ accounts and eventually collapsed after FTX blew up last fall. The restructuring plan, which more than 90% of creditors approved, will enable BlockFi to recover the assets it lost to crypto exchange FTX and failed hedge fund Three Arrows Capital, allowing the lender to put more money in creditors’ pockets, the company said.

“Success in this [process] could increase client recoveries, depending on the product and jurisdiction,” according to the notice sent to creditors.

Lawyers for BlockFi did not immediately respond to CoinDesk’s request for comment.

A bankruptcy court must greenlight the plan to finalize it, BlockFi said in the email. Once it’s approved, the company will be cleared to distribute the related funds to its creditors.

Customers holding funds in BlockFi Interest Accounts or BlockFi Retail Loans should get their funds back within the next few months, the company said. The company will also continue to distribute funds to BlockFi Wallet clients, it said.