- BlockFi has formulated a restructuring plan that has garnered approval from its creditors.
- The defunct crypto lender will soon initiate its first wave of distributions.
- The bankruptcy court will now decide if the bankrupt lender moves forward with its plan.
Since FTX’s collapse, defunct crypto lender BlockFi has been actively working to formulate a restructuring plan that garnered approval from both the bankruptcy court and its creditors. However, for months, every attempt from the beleaguered lender has been shut down, often stoking tensions.
After much hit and trial, BlockFi has finally come up with a solid bankruptcy restructuring plan, leaving it all on the court to decide if the lender goes through with it.
BlockFi Moves Forward With its Plan
On Friday, September 29, creditors finally approved BlockFi’s bankruptcy restructuring plan, clearing one of the major hurdles in a months-long process and marking a significant victory for its customers.
The restructuring plan, which over 90% of creditors approve, will set the stage for the defunct lender to recover the assets it lost to the FTX fiasco and the ill-fated hedge fund Three Arrows Capital (3AC), allowing the lender to honor its commitment to its creditors.
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While this marks a major win for BlockFi’s patrons, the ultimate verdict still rests with the bankruptcy court, which must give its seal of approval to bring the plan to its final fruition. Once approved, BlockFi can move forward with the distribution of funds to its valued creditors.
Over the following months, BlockFi has shared that it plans to kick start its first wave of distributions by paying back customers holding funds in Interest Accounts, Retail Loan Accounts, and BlockFi Wallets.
On the Flipside
- According to leaked internal documents, crypto exchange FTX owes $1.2 million to BlockFi. It is still being determined whether BlockFi creditors will get any of that money.
- FTX’s new management team has been on a mission to retrieve its funds, suing SBF’s parents, his past deals, and more in the process.
Why This Matters
BlockFi is taking a major step in the right direction by resolving its bankruptcy, which could lead to important implications for its creditors and users.
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