BlockFi Files Motion With Bankruptcy Court to Release Customer Funds

• Withdrawals and transfers from BlockFi Interest Accounts will not be affected.
• The bankruptcy court will conduct a hearing on January 9 to determine the result.

BlockFi, a defunct cryptocurrency lender, has filed a motion with the U.S. Bankruptcy Court seeking permission to release its customers’ cryptocurrency holdings in BlockFi Wallet Accounts. Withdrawals and transfers from BlockFi Interest Accounts will not be affected by this request, since they are currently suspended.

The lender, which filed for Chapter 11 bankruptcy protection in late November due to the FTX outbreak, described the decision as an “important step toward our goal of returning assets to clients through our chapter 11 cases” in a message to customers.

Hearing Scheduled Next Month

BlockFi International Ltd., the company’s international equivalent, filed a similar lawsuit with the Supreme Court of Bermuda about BlockFi Wallet Accounts. In addition, the corporation asked the court for permission to change the user interface “to properly reflect assets as of the platform pause.”

The bankruptcy court will conduct a hearing on January 9 to determine whether or not to grant BlockFi’s request. The equivalent international entity hearing will take place on January 13.

BlockFi is not the only company whose customers have been prevented from withdrawing payments due to the collapse of FTX. A court earlier this month ordered Celsius to restore $44 million in cryptocurrency to its customers, but only those tokens that had never been used in the company’s primary interest-bearing service.

The bulk of customer money held by Celsius, $210.02 million in interest-bearing accounts, have an uncertain future. Former FTX CEO SBF was arrested last week in the Bahamas and is seeking bail. Extradition to U.S. is also the talk of the town with multiple charges leveled against the former CEO.

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