BlockFi Plans To Reopen User Digital Asset Withdrawals This Summer

Key Points:

• The bankrupt cryptocurrency trading platform BlockFi wants to reopen customer withdrawals this summer.
• It may begin allowing customers to withdraw digital assets held in BlockFi wallet accounts that are not subject to potential preference claims.
• Any withdrawals must be made in batches, and the eligible individual will receive an email from the company.

The bankrupt cryptocurrency trading platform BlockFi shared its plans to reopen withdrawals on Monday in an email sent to users.

The crypto lender hopes to complete the work and tests needed to allow some customers to withdraw funds this summer.

In an email to customers on Monday, BlockFi said: “At that point, we will be able to begin allowing customers to withdraw digital assets held in non-preferred BlockFi wallet accounts potential funds. Any withdrawals must be made in batches, and eligible individuals will receive an email from the company. Users are advised to set up a third-party wallet for withdrawals.”

The company said that on June 9, the Supreme Court in Bermuda issued an order allowing the platform to reopen withdrawals for customers with BlockFi Wallet accounts. The platform has also updated the user interface to accurately reflect users’ transactions and account balances as of the platform suspension date of November 10, 2022.

BlockFi has struggled to allow customers to return funds since halting customer withdrawals on November 10 and then filing for Chapter 11 bankruptcy protection two weeks later. The crypto lender was forced to suspend withdrawals last year following the collapse of the FTX exchange. It has about 100,000 creditors, assets, and liabilities in the tens of billions of dollars.

According to a BlockFi representative at the time, the company’s liquidity crisis was caused by loans related to Alameda, an investment fund with the same founder Sam Bankman-Fried as FTX. In addition, most of the platform’s assets were stuck on the floor when FTX declared bankruptcy, leaving users and partners unable to withdraw their money.

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