BlockFi, a defunct cryptocurrency lending platform, has submitted a motion asking the United States Bankruptcy Court for permission to permit its users to withdraw digital assets now kept in BlockFi Wallets.
The lender requested permission from the bankruptcy court to recognize client withdrawals from wallet accounts as of the platform’s stop on November 10 in a move submitted on December 19 to the U.S. Bankruptcy Court for the District of New Jersey.
Additionally, approval is sought in the court proceedings so that the user interface can be updated to accurately display transactions following the platform’s stop.
BlockFi described the motion as “an essential step toward our goal of recovering funds to clients through our chapter 11 proceedings” in a widely circulated email sent to the impacted users, adding:
“It is our belief that clients unambiguously own the digital assets in their BlockFi Wallet Accounts.”
BlockFi claims that this action won’t have an impact on transfers or withdrawals from BlockFi Interest Accounts, which are currently paused.
Additionally, the lending platform has stated that it intends to ask Bermuda’s Supreme Court for “equivalent remedy with respect to BlockFi Wallet Accounts held at BlockFi International Ltd.”
The business with its non-U.S. operations is based in Bermuda, and BlockFi International is a division of that business.
On November 11, BlockFi advised that customers refrain from depositing funds into BlockFi wallets or Interest Accounts and froze client withdrawals, citing a lack of clarity surrounding FTX.
For the company and its eight subsidiaries, BlockFi filed for Chapter 11 bankruptcy on November 28 in the United States Bankruptcy Court for the District of New Jersey. On the same day, BlockFi International filed for bankruptcy with the Supreme Court of Bermuda.
