BlockFi, the prominent cryptocurrency lender, is making significant strides in reorganization efforts, with the United States bankruptcy court provisionally approving the company’s disclosure statement in New Jersey.
In a joint statement released on August 2, 2023, BlockFi and the Official Committee of Unsecured Creditors have called upon all eligible parties to vote in favor of the proposed Plan, with the voting date set for September 11, 2023.
If the Plan receives approval, it will mark the conclusion of the Chapter 11 cases, bringing much-needed relief to the affected clients as their funds would be returned. BlockFi’s focus on retrieving funds from other failed businesses, including Alameda, FTX, 3AC, Emergent, Marex, and Core Scientific, is notable. The lender aims to maximize recovery for clients while safeguarding their assets against potential third-party claims that could have severe implications.
BlockFi has revealed that it will waive all rights and causes of action it may have against its customers. However, this waiver is conditional and applies only if those clients choose not to opt out of a voluntary third-party release offered through the Plan.
Clients who have withdrawn $250,000 or more from their BlockFi Interest Account (BIA) or BlockFi Private Client Account (BPC) on or after November 2, 2022, will be exempt from the distribution.
On the other hand, clients who moved less than $250,000 from their BIA or BPC to their Wallet or withdrew less than $250,000 from their Wallet before the Platform Pause on November 10, 2022, will not have to return any of those funds.
For smaller claims, the BlockFi Estate will provide a one-time cash payout. Clients with claims below $3,000 or those who voluntarily reduce them to $3,000 will be eligible to receive these payments, anticipating 50% of their claims in cash.
This latest development puts BlockFi on a clear path toward resolution and financial recovery. The approval of the Plan would provide much-needed reassurance to clients who have been anxiously awaiting the return of their funds. By addressing potential legal hurdles proactively, BlockFi aims to protect its clients’ interests while laying the groundwork for a stronger future.
The journey to reorganization has been arduous, but with the acceptance of the disclosure statement and the proposed Plan, there is hope that the worst may be behind BlockFi. As the voting date approaches, all eyes will be on the outcome, which will undoubtedly have significant implications for the company and its stakeholders.
Consequently, all parties eagerly await September 11, 2023, to determine the course of BlockFi’s future. Moreover, the successful approval of the Plan would pave the way for the company’s resurgence and the return of clients’ funds.