Key Points:
- BlockFi intends to close its loan platform and disperse the proceeds to creditors.
- The anticipated action comes after a failed attempt to raise cash to repay creditors by selling the platform.
BlockFi, the bankrupt cryptocurrency lender, intends to liquidate its platform after determining that transferring the company to a new owner would not create enough value for its creditors.
According to court documents, the impending action follows a failed attempt to raise cash to repay creditors by selling the platform.
Fund recovery for customers and creditors of insolvent crypto lender will be mainly reliant on the firm’s claims against commercial counterparties such as FTX and Alameda, according to court documents dated Friday.
BlockFi said in its wind-down plan filed with the United States Bankruptcy Court for the District of New Jersey that the success or failure of the lawsuit supporting these claims would make a difference in excess of $1 billion to customers who are waiting for their money back.
The plan also included a list of projected recoveries, including a $1.06 billion liquidation of BlockFi Inc. Interest Account Claims, a $216 million liquidation of BlockFi Lending LLC Private Client Account Claims, and a $371 million liquidation of BlockFi International Ltd. Private Client and Interest Account Claims, though actual recoveries received by clients may differ materially from projected figures.
After engaging with possible bidders to encourage a sale of its digital assets platform and around 660,000 client accounts since January, the business assessed that a sale might not yield substantial value for creditors. One factor for the lack of value-maximizing proposals from potential purchasers, according to the firm, was recent regulatory changes. According to its petition, BlockFi owes over $1.3 billion to its top 50 creditors.
With the failure of FTX, the crypto lender filed for bankruptcy protection in November of last year. It has now worked to sell off significant components of its corporate activities, including its bitcoin mining.
According to the May 12 filing, BlockFi might still seek an alternate arrangement, including the sale of all, or substantially all, of the Debtors’ assets. Before the plan can be implemented, the bankruptcy court must first approve it.
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Harold
Coincu News
Source: https://news.coincu.com/187566-blockfi-wants-to-liquidate/