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Crypto Lender BlockFi Receives Conditional Approval For Bankruptcy Plan

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In a recent development, popular cryptocurrency lender BlockFi has announced that a US court has conditionally approved its bankruptcy plan and ordered that everyone entitled to vote should vote to accept the plan.

Much-Needed Respite For Creditors

BlockFi’s restructuring plan continues to move forward following the recent announcement by the firm that its disclosure statement had been conditionally approved by the United States Bankruptcy Court in New Jersey. The lending platform says that once the plan is approved, it will proceed to retrieve funds from various defunct companies, including FTX, Emergent, and Alameda.

The plan provides an opportunity for client releases, excluding them from future claims by BlockFi, except for clients who withdrew above $250,000 from their interest accounts or private client accounts after November 2022. The platform also intends to distribute cash to creditors with claims below $3,000.

The US Securities and Exchange Commission had also agreed to delay the collection of a $30 million fine until BlockFi’s creditors were repaid. The amount is part of the outstanding balance of a $50 settlement reached with the SEC in February 2022.

According to BlockFi’s Chief Restructuring Officer Mark Renzi, the platform’s mission through this ongoing exercise “has been to maximize recoveries for our creditors, and conditional approval for our Disclosure Statement moves us one step closer to accomplishing that goal.”

He also noted that BlockFi remains confident that its plan offers “the best path to expeditiously return crypto back to our clients and we strongly urge BlockFi’s clients to vote to accept it.”

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Author: Best Owie

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