BlockFi Complies with Court Order, Permits Crypto Withdrawals for Eligible US Users
On August 17, BlockFi, a New Jersey-based crypto lending company, stated that it had initiated withdrawals for eligible users' wallets in the US in compliance with a court order issued by the US Bankruptcy Court for the District of New Jersey.
However, due to ongoing legal proceedings, these withdrawals only apply to some wallets managed by international users.
"As authorized by the Court in the Wallet Order, at this time, eligible clients include U.S.-based BlockFi Wallet account holders who [...] did not withdraw or transfer more than $7,575 worth of digital assets from their BlockFi Interest Account (BIA) or BlockFi Private Client (BPC) on or after November 2, 2022 [and] did not hold any trade-only assets in their Wallet at the time of Platform Pause on November 10, 2022, at 8:15 P.M. ET," said BlockFi in its notice to users.
In late November, when BlockFi sought Chapter 11 bankruptcy protection due to FTX-related issues, it stated that the move is a crucial stride towards returning assets to clients through the Chapter 11 cases, the company said in a user communication.
The issues plaguing BlockFi are closely tied to the lifeline it received in July when FTX extended a $400 million credit facility. Yet, this bailout, now considered part of a series of unfavorable FTX deals, came with conditions: Bankman-Fried could acquire BlockFi for as little as $240 million the following year.
Following FTX's bankruptcy filing in the same month, BlockFi expressed surprise at the situation as they revealed that they, like the rest of the world, learned about the developments through Twitter.
In November 2022, BlockFi, the crypto lender facing bankruptcy, ceased client withdrawals and initiated motions to return user funds in December of
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