BlockFi Wants to Allow Client Withdrawals from Crypto Wallets

  • BlockFi seeks bankruptcy court approval for customers to withdraw cryptocurrencies from BlockFi Wallet. 
  • After the collapse in FTX, the crypto lender had halted all activity.
  • The filing does NOT specify that the filing seeks approval for withdrawals from its flagship BlockFi interest account. 

BlockFi is a cryptocurrency lender filed for voluntary Chapter 11 bankruptcyAfter the implosion FTX, is seeking court permission to allow customers to withdraw cryptocurrencies. 

According to a report, the platform aims to provide clients with access to their digital assets through its BlockFi Wallet product. filing with the US Bankruptcy Court for the District of New Jersey

“The Debtors have no legal and equitable interest in cryptocurrency that was in the Wallet Accounts at Platform Pause, and clients should have the ability to withdraw such assets on the platform if desired,” stated the December 20 filing to honor withdrawals from Wallet accounts. 

A hearing will be held by the court on January 9 regarding the matter. 

The court’s request does not provide access for clients of the company’s flagship BlockFi interest account. This account provided yield to customers who kept their crypto assets with it. 

In late November, the platform, which is based in New Jersey, ceased all activity after FTX collapsed due to a liquidity crunch. There were also allegations that FTX customer funds were misappropriated by the crypto exchange run by Sam Bankman Fried. 

BlockFi requested bankruptcy protection due to its “significant exposure” to FTX, and the associated corporate entities. 

Bankman-Fried faces multiple criminal and civil charges in the US. seeking his extradition from the Bahamas.

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