BlockFi Receives Court Approval for Repaying Crypto Customers

BlockFi’s Liquidation Plan Approved

The customers of bankrupt cryptocurrency lending platform BlockFi have taken a step towards being paid out after the United States Bankruptcy Court in New Jersey approved its liquidation plan.

On Sept. 26, Bankruptcy Judge Michael A. Kaplan approved the third amended Chapter 11 plan for BlockFi, as per a court filing on the same day.

The amount of repayment received by BlockFi’s unsecured creditors will be largely dependent on the outcome of the legal battle between BlockFi and FTX and other bankrupt crypto firms.

BlockFi’s first liquidation plan was submitted to the bankruptcy court on Nov. 28, and was followed by first, second and third amended plans on May 12, June 28 and July 31 respectively, as stated in court filings.

BlockFi’s Liquidation Plan Approved After Settling Dispute

BlockFi’s liquidation plan was given the green light after the firm was able to reach a settlement with its creditors committee about the senior management of the company.

A court filing on September 25th indicated that the creditors committee accepted the settlement, which likely reduced the administrative costs and expenses that could have impacted the recoveries.

The now-bankrupt lending platform blamed the collapse of FTX for its own failure, though the creditors committee had raised questions about BlockFi’s relationship with FTX and its former CEO Sam Bankman-Fried.

Reports suggest that BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three biggest creditors and $220 million to the bankrupt crypto hedge fund Three Arrows Capital.

Law firms Kirkland & Ellis LLP and Haynes and Boone LLP are representing BlockFi in the world of top crypto web 3.0, web 3.0 crypto coins name list, top web 3.0 crypto projects, and top web 3.0 crypto.

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