The Calvary Comes to an End for BlockFi Users

Users of BlockFi, the bankrupt company, have reason to rejoice. The company has announced that it has received authorization from the bankruptcy court to resume withdrawals as of next summer. BlockFi has communicated to its users the terms and mechanisms for the imminent withdrawal of funds. BlockFi users have been deprived of their funds since November 2022, following the collapse of FTX.

End of the ordeal for BlockFi users?

Users of BlockFi could soon recover their funds, which have been frozen since last November.

In a e-mail sent to its customers, BlockFi has announced that the bankruptcy court has authorized it to reactivate the user interfaces. As a result, BlockFi plans to finalize its platform update this summer, allowing customers to withdraw their funds.

However, the withdrawal of funds blocked on BlockFi in stages. Some users will still have to wait a long time to get their funds back. In fact, the company plans to make withdrawals in batches. In addition, accounts BlockFi eligible for withdrawal will receive an e-mail from the company. In the meantime, users are encouraged to set up an external wallet to receive funds withdrawn from BlockFi.

BlockFi, FTX’s collateral victim on the rebound

November 2022, BlockFi declared bankruptcy after suspending the withdrawal of funds for its customers. At the same time, BlockFi and its associated companies filed for Chapter 11 bankruptcy protection. This difficult situation for BlockFi was linked in particular to the collapse of FTX. Indeed, BlockFi had contracted with FTX a $400 million loan. Faced with a difficult economic situation, FTX was unfortunately unable to meet its commitments.

BlockFi’s bankruptcy, a few days after FTX’s collapse, had further eroded crypto investors confidence in centralized platforms. The possibility of a resumption of withdrawals shows that good bankruptcy management can limit the effects on third parties. Let’s hope FTX succeeds in doing the same.