Disappeared crypto lending firm BlockFi has taken further steps to expedite the return of users’ funds by applying to the courts for permission to transfer “trading-only” assets from users’ accounts to stablecoins for withdrawal. is teaching. The move follows a fund return process that the company started in August.
On August 29, BlockFi filed an application with the New Jersey Federal Bankruptcy Court seeking authorization to convert designated trading-only assets into stablecoins. These assets, including Algorand’s native tokens ALGO, Bitcoin Cash and Dogecoin, have restrictions on easy withdrawals. BlockFi is proposing a one-time exchange to a stablecoin like Gemini Dollar (GUSD) to address this issue.
The application reveals that trading-only assets represent less than 0.5% of total U.S. wallet assets held by BlockFi users. Additional tokens such as Cardano ADA, Solana SOL and Avalanche AVAX are held separately by BlockFi International.
BlockFi’s Board of Creditors, duly recognized by the court, has upheld the company’s request to expedite the exchange process, according to the filing.
After months of uncertainty, BlockFi customers were finally able to withdraw their funds. Earlier this month, the lender began withdrawing money from wallets of eligible users in the US. While this was certainly a positive step, this withdrawal option is currently limited to US-based customers. For customers based abroad, the situation is even more complicated as legal proceedings are still ongoing.
The move comes on the heels of a New Jersey judge granting BlockFi wallet holders permission to re-access funds that had been frozen on the platform since November.
The ruling means BlockFi custodial account holders could get back about $300 million worth of assets, but the judge said the assets belonged to the customer and not part of the company’s wealth. Ta. However, the ruling does not affect withdrawals or transfers from BlockFi interest rate accounts, which are currently suspended.
About $375 million that users attempted to transfer from accounts paid by lending back cryptocurrencies to the company is still locked in BlockFi.
This development is part of the company’s strategy to address its financial situation and chart a course forward. Once the bankruptcy plan is finalized, BlockFi will prioritize collecting funds from major debtors including Alameda Research, FTX, Three Arrows Capital, Emergent, Mallex and Core Scientific.
