The now-defunct crypto platform BlockFi has recently negotiated with its creditors for a potential bankruptcy-related plan. As a result of that, the creditors of the company have approved BlockFi’s strategy for bankruptcy restructuring, eliminating one of the conclusive hindrances. Formerly, the months-long procedure witnessed many hurdles.
BlockFi Gets Approval for Its Bankruptcy Strategy from the Creditors
With the accomplishment of the respective approval, the firm will be in a position to reimburse its consumers. BlockFi sent an email to its creditors on Friday to disclose the respective development. The defunct crypto lending forum had a place among several digital asset-related firms that halted the accounts of their clients. In addition to this, they ultimately crashed following the collapse of the notorious crypto empire known as FTX.
The crypto exchange FTX as well as the other companies associated with it submitted their bankruptcy filings after a huge crash. On the other hand, the restructuring plan of BlockFi is supported by above ninety percent of creditors. The respective strategy will permit the platform to redeem the assets that it lost due to FTX.
Apart from that, it can also recover the funds lost to Three Arrows Capital (the disastrous hedge fund). This would permit the lending platform to return the funds to the creditors, as BlockFi stated. The notice that the creditors received from BlockFi mentioned that its effectiveness in this procedure could elevate the consumer recoveries. Nonetheless, it added that it will depend on the jurisdiction as well as the product.
The Creditors Will Obtain Their Money in the Upcoming Months, Says BlockFi
A bankruptcy court requires approval of the respective plan for its finalization, according to the email that BlockFi sent. Following the authorization, it added, the firm will have the permission to disseminate the relevant assets to the creditors accordingly. Hence, the platform revealed that the creditors will get back their funds in the upcoming months.
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