BlockFi, the bankrupt cryptocurrency lender, has petitioned the United States Bankruptcy Court to allow clients to withdraw cryptocurrencies held in their BlockFi Wallet Accounts.
Step Closer to Client Refunds
This request has no effect on withdrawals or transfers from BlockFi Interest Accounts, which are currently paused, according to the statement.
The lender, which filed for Chapter 11 bankruptcy protection in late November, citing FTX contagion, called the move a “important step toward our goal of returning assets to clients through our chapter 11 cases” in a statement sent to users.
The firm filed a similar claim in Bermuda’s Supreme Court regarding BlockFi Wallet Accounts held by BlockFi International Ltd, the firm’s international counterpart. According to another court filing, the company also requested that the user interface be updated “to properly reflect assets as of the platform pause.”
Upto Bankruptsy Court
The bankruptcy court will make a decision on whether to approve BlockFi’s motion on January 9. A similar hearing for its international entity will be held on January 13. BlockFi is far from the only company affected by FTX’s demise and whose customers are unable to access their funds.
Earlier this month, a judge ordered Celsius to return approximately $44 million in cryptocurrency to customers, covering only funds that had never been touched by the company’s flagship interest-bearing service.
The fate of the vast majority of Celsius’s consumer funds, the $210.02 million held in interest-bearing accounts, remains unknown.
FTX Fallout Continues
The FTX fallout continues with political implications on the cards. This is after three well-known Democratic organizations resolved to return over $1 million to investors who lost their money as a result of misappropriation following the arrest of former FTX CEO Sam Bankman-Fried (SBF).
Sam Bankman-Fried was denied bail in a Bahamas Magistrate Court and could be held at the country’s Fox Hill Prison for up to two months. This facility is well-known for its “tough” working conditions and a history of physically abusing inmates.
Bankman-Fried will most likely be detained in the Bahamas until February while extradition proceedings with the US proceed. The former FTX CEO is under investigation by the Justice Department, the Commodity Futures Trading Commission, and the Securities and Exchange Commission for defrauding lenders and investors.
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