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U.S. crypto lender BlockFi may reopen withdrawals soon after bankruptcy filing

BlockFi is moving to allow customers to withdraw from their personal wallets. Courtesy photo

New York, U.S. | Xinhua | U.S. cryptocurrency lender BlockFi Inc. may allow its clients to withdraw their assets soon according to the first hearing on Tuesday, one day after its announcement of voluntary bankruptcy.

A motion could be filed quickly to allow BlockFi’s customers to withdraw from their personal wallets, according to Joshua Sussberg, a Kirkland & Ellis lawyer representing BlockFi.

“We want to make sure we get people back as much of their value as quick as we can,” Sussberg said.

BlockFi has strong regulatory oversight, corporate controls and risk management, according to Sussberg.

BlockFi and eight of its affiliates on Monday commenced voluntary cases under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey to stabilize its business and to consummate a comprehensive restructuring transaction that maximizes value for all clients and other stakeholders, announced BlockFi on Monday.

BlockFi suspended client withdrawals on Nov. 11 following the bankruptcy of cryptocurrency derivatives exchange FTX.com and its affiliates on the same day.

The crypto lender said it would focus on recovering all obligations owed to it by its counterparties, including FTX and associated corporate entities.

BlockFi provided 671 million U.S. dollars of loans to FTX’s trading arm Alameda Research Limited and has 355 million U.S. dollars worth of digital assets frozen on the FTX platform, according to Sussberg.

BlockFi has more than 100,000 creditors with estimated assets and liabilities of between 1 billion U.S. dollars and 10 billion U.S. dollars, according to BlockFi.

Based in Jersey City, New Jersey, BlockFi was created in 2017 to provide credit services to markets with limited access to simple financial products.

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