Customers of failed cryptocurrency lender BlockFi may soon be able to get back some of their frozen crypto assets after a bankruptcy court judge reportedly gave the green light to the company’s liquidation plan.
BlockFi stopped allowing its customers to withdraw funds in November 2022, citing a lack of clarity from FTX, one of the lending platform’s largest borrowers.
According to a new report from Bloomberg, Judge Michael Kaplan said during a hearing on Tuesday that he will approve the liquidation plan, which would see unsecured BlockFi creditors get about 35% to 63% of the money they are owed and some creditors would receive partial refunds. Bitcoin (BTC) and Ethereum (ETH).
However, the outcome of BlockFi’s legal battle against FTX, crypto hedge fund Three Arrows Capital and other bankrupt digital asset companies could potentially increase creditor recoveries by up to $1 billion.
Kaplan approved the liquidation plan after BlockFi’s senior management and the creditors’ committee resolved their dispute stemming from allegations that management ignored FTX’s red flags.
In a court filing, the commission says the settlement will avoid administrative costs that could reduce the amount BlockFi customers could receive.
According to the report, the commission hopes refunds will begin sometime this year.
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