Bankrupt crypto lending platform BlockFi has filed a petition seeking permission from the US bankruptcy court to allow its users to withdraw digital assets currently locked away in BlockFi wallets.
In a move deposit On Dec. 19 in the U.S. Bankruptcy Court for the District of New Jersey, the lender filed for court approval to honor customer withdrawals from wallet accounts beginning with the platform’s Nov. 10 break.
The court documents also seek permission to update the user interface to correctly reflect transactions from the platform’s break.
In a wide share email sent to affected users, BlockFi called the motion “an important step toward our goal of returning assets to customers through our Chapter 11 cases,” adding
“We are confident that customers own the digital assets in their BlockFi Wallet accounts unambiguously.”
According to BlockFi, this motion will not impact withdrawals or transfers from BlockFi Interest Accounts, which remain on hiatus at this time.
The lending platform also signaled its intention to seek “similar relief from the Supreme Court of Bermuda with respect to BlockFi wallet accounts held at BlockFi International Ltd.”
BlockFi International is a subsidiary of the Bermuda-based company that handles its non-US operations.
Crypto blogger Tiffany Fong shared the communication sent to her by BlockFi on Dec. 19, commenting that the beleaguered company appears to be moving much faster than Celsius, which filed for bankruptcy. five months ago in july unlike BlockFi’s bankruptcy filing in November.
wow, @BlockFi has already filed a petition requesting client withdrawals for assets held in BlockFi Wallet accounts. S/O to BlockFi to move exponentially faster than @CelsiusNetwork in chapter 11. pic.twitter.com/JvtWzMklNA
— Tiffany Fong (@TiffanyFong_) December 20, 2022
According to court documents, a hearing to decide whether the motion will be granted is scheduled for January 9, 2023.
While a separate hearing regarding wallet accounts held at BlockFi International Ltd is scheduled to take place in the Supreme Court of Bermuda on January 13, 2023.
BlockFi halted customer withdrawals and asked customers not to deposit to BlockFi wallets or interest accounts on November 11, citing a lack of clarity around FTX.
Before November 28, BlockFi filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of New Jersey for the company and its eight subsidiaries. BlockFi International filed for bankruptcy with the Supreme Court of Bermuda on the same day.