Blockify emerged from bankruptcy on Tuesday, saying it would cease operations and begin returning crypto assets to customers after 11 months amid turmoil in the cryptocurrency industry. FTXits decline
Jersey City, New Jersey-based BlockFi will continue to overpay through the bankruptcy of other crypto companies, including FTX and Three arrows capital Under a bankruptcy plan approved by the court last month.
Success in that case could boost client recovery, Blockfy said Tuesday.
BlockFi estimated in court filings that customers with interest-bearing Earn accounts would receive between 39.4 percent and 100 percent of the value in their accounts.
In its bankruptcy filing in November 2022, Blockfy cited its debt to FTX’s sister firm Alameda as one of the reasons for its collapse.
Separately, FTX founder Sam Bankman-Fried is currently on trial for fraud in Manhattan.
BlockFi says withdrawals are currently available to almost all of its wallet customers. Those with BlockFi interest accounts and retail loans will be repaid in the coming months, but the amount they receive could change based on the outcome of the FTX bankruptcy, BlockFi said.
Crypto The lenders, the de facto banks of the crypto world, have grown during the pandemic, attracting retail customers with double-digit rates in exchange for their crypto deposits.
Such companies don’t have to hold the same capital or liquidity buffers as traditional lenders, and some have exposed themselves when collateral shortfalls have forced them — and their customers — to suffer big losses.
© Thomson Reuters 2023