BlockFi Exits Bankruptcy:
After nearly 11 months since its bankruptcy filing, BlockFi has successfully emerged from bankruptcy. This marks its return to the cryptocurrency sector after facing challenges due to the collapse of FTX.
BlockFi intends to implement the actions outlined in its bankruptcy plan. This includes recovering assets it believes are owed to the company by FTX, Three Arrows Capital, and other relevant entities. However, this asset recovery process may face contentious hurdles since these entities are navigating their bankruptcy proceedings as well.
Withdrawals and Repayments:
BlockFi has made withdrawals available to most of its Wallet customers. For BlockFi Interest Accounts and Retail Loans, repayments will occur over the next few months. The exact amounts customers receive will depend on the outcomes of the FTX bankruptcy, which introduces an element of uncertainty.
Crypto Lenders in Focus:
BlockFi’s journey mirrors the challenges faced by crypto lenders, often likened to traditional banks in the crypto world. During the pandemic, these lenders attracted retail customers with high-interest rates in exchange for crypto deposits. However, they are not subject to the same capital and liquidity requirements as traditional banks, leaving them exposed when collateral shortages lead to significant losses for both the lenders and their clients.