The liquidation plan of bankrupt cryptocurrency lending platform BlockFi has been approved by a United States Bankruptcy Court in New Jersey, bringing the customers one step closer to being paid out. On September 26, Bankruptcy Judge Michael A. Kaplan gave his approval to BlockFi’s third amended Chapter 11 plan. This decision was made after a court hearing attended by various parties involved in the case, as revealed by a filing on the same day.
The amount of repayment that the unsecured creditors of BlockFi will receive largely depends on the outcome of the company’s legal battle against FTX and other bankrupt cryptocurrency firms. BlockFi’s liquidation plan was given the green light after the firm reached a settlement with the creditors committee, putting an end to a long-standing dispute related to the company’s senior management.
The now bankrupt lending platform attributed its failure to the collapse of FTX, despite concerns raised by the creditors committee about BlockFi’s relationship with FTX and its former CEO Sam Bankman-Fried. The blame game between the parties involved has been ongoing, with BlockFi claiming that FTX’s collapse was the main cause of its troubles.
It is estimated that BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to bankrupt crypto hedge fund Three Arrows Capital. The repayment to these creditors will be determined as the liquidation process progresses.
The approval of BlockFi’s liquidation plan marks a significant development in the bankruptcy proceedings, providing hope for the customers who were affected by the platform’s collapse. However, it is important to note that this is a developing story, and further information will be added as it becomes available.
The BlockFi case highlights the risks and challenges faced by the cryptocurrency industry, particularly in relation to lending platforms. With the increasing popularity of cryptocurrencies, it is crucial for investors and customers to exercise caution and conduct thorough due diligence before engaging with such platforms.
As the liquidation process continues, it will be interesting to see how BlockFi’s legal battle against FTX and other bankrupt cryptocurrency firms unfolds and how it will impact the repayment to the company’s creditors. The outcome of this case will not only have implications for the individuals and organizations involved but also for the broader cryptocurrency industry as a whole.
In conclusion, the approval of BlockFi’s liquidation plan is a positive step towards resolving the bankruptcy proceedings and providing some relief to the affected customers. The repayment to the unsecured creditors will depend on the outcome of the legal battle with FTX and other bankrupt cryptocurrency firms. As this story unfolds, it serves as a reminder of the risks associated with the cryptocurrency industry and the need for careful consideration when engaging with such platforms.