BlockFi to move forward with Chapter 11 plan

Less than a year after declaring bankruptcy, BlockFi’s bankruptcy plan was confirmed

September 29, 2023 05:44 pm

Jane0606/Shutterstock modified by Blockworks

BlockFi’s Chapter 11 plan received approval earlier this week, supported by both the company’s management and the Committee of Unsecured Creditors.

According to a blog post, the plan got 90% approval across all voting classes.

The former crypto lender filed for bankruptcy in late 2022 following the collapse of FTX. It followed in the footsteps of bankrupt lenders Voyager and Celsius.

BlockFi will continue to seek recoveries from the Three Arrows Capital and FTX bankruptcies as part of the plan, which would then increase recoveries for customers.

As Blockworks previously reported, BlockFi is also fighting claims from both FTX and 3AC, which both seek to recover funds. The company alleged, however, that it fell victim to the former crypto exchange.

Additionally, back in early September, FTX objected to BlockFi’s bankruptcy plan, alleging that it “still suffers from certain fundamental shortcomings.”

The plan will ensure that digital assets are distributed to customers, including BlockFi Interest Account holders.

Regarding the interest accounts specifically, the blog post said that “the company expects that this will be the first wave of distributions, which will be followed by additional distributions.”

BlockFi is still working to distribute “funds to clients with assets in the BlockFi Wallet product,” it said.

After the plan goes into effect, BlockFi will exit bankruptcy, and then start winding down the business. However, the timing is still uncertain due to being dependent on “a few factors, including the Bermuda court, which regulates our international clients, recognizing the US bankruptcy court’s approval of the plan.”

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