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Emerging from a financial quagmire, the cryptocurrency lending service BlockFi has announced its readiness to repay some of its debts. A recent blog update on October 24 conveyed that almost all of its Wallet users have access to withdrawal features, with those using BlockFi Interest Account (BIA) and Loan services anticipated to see some asset withdrawals as early as 2024.
With its financial standing now more stable after its bankruptcy resolution, BlockFi is eyeing asset recovery from other entities that it claims are in debt.
This includes cryptocurrency platforms that have also faced bankruptcy, notably Three Arrows Capital, often referred to as "3AC", and FTX. As BlockFi regains its footing, it aims to allocate assets to its debtors while addressing pending claims consistently.
For an efficient withdrawal process, BlockFi has encouraged its Wallet users with assets on their platform to activate a withdrawal request through the app. This would help the team in expediting the withdrawal.
For its BIA and Loan users, BlockFi has provided assurance of initial distribution of funds as per the pre-decided bankruptcy blueprint. Although the starting distribution is targeted for 2024, any subsequent disbursements hinge on various factors, including the outcomes of BlockFi's legal engagement with FTX concerning bankruptcy.
Looking back, BlockFi's liquidity challenges began surfacing around the middle of 2022, following the downfall of Terra’s stablecoin. In a bid to salvage BlockFi, FTX stepped in with a hefty $400-million financial boost. Yet, FTX's own bankruptcy in November further destabilized BlockFi.
It was only on August 17 that a U.S. court sanctioned BlockFi's plan to gradually dissolve the firm and repay its debtors, a decision upheld by the bankruptcy court. While initial permissions restricted U.S. patrons from withdrawals, recent updates to BlockFi's Wallet withdrawal guide have extended this provision to their international clientele.
