BlockFi seeks court order to permit user withdrawals from wallet accounts

BlockFi, a crypto-lending platform, filed in the District of New Jersey bankruptcy proceedings a ходатайство to permit withdrawals by users from wallet accounts.

The firm also sought permission to “coordinate and adjust” client interfaces to bring digital-asset accounting in order. It linked this to attempts to execute transactions after operations ceased in November.

The lawyers for the company argued the motion on the custodial service’s user agreements. According to them, wallet-held assets are the clients’ sole property.

On November 11, BlockFi suspended withdrawals, citing the FTX and Alameda Research crisis. A few days earlier, founder Flori Marquez assured that all of the company’s products were operational and that the business did not depend on the firms Sam Bankman-Fried.

On November 28, BlockFi and eight subsidiary entities filed for bankruptcy under Chapter 11 of the US Bankruptcy Code. The FTX Group took this step on November 11.

According to the filing, it has more than 100,000 creditors. The company’s assets and liabilities are valued at between $1 billion and $10 billion.

“The debtors do not have a legal or equitable interest in the cryptocurrency held in wallet accounts at the time the platform paused operations. Clients should be able to withdraw such assets if they wish,” BlockFi’s lawyers said in the motion.

A hearing on the motion was scheduled for January 9, 2023.

Earlier in December, the bankrupt crypto-lending platform Celsius Network secured permission to return $43.87 million in digital assets to custodial account holders. The firm had filed the motion in September.

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