The approximately $300 million held in custodial accounts are not property of the BlockFi platform and may be returned to their owners. This was ruled by the bankruptcy judge, according to CoinDesk.
Such an interpretation does not apply to the $375 million in the BIA, he added.
The judge noted that all transfers from the latter type of account to custodial after 20:15 on November 10, 2022 were not completed, although in the BlockFi interface users received a notification of successful completion of the operations.
“Holders of the BIA placed their assets with full understanding that they were taking on certain risks in exchange for the possibility of higher profits. Custodial-wallet holders did not take this step. Their ownership rights to the property should not be blurred by the first category of platform users,” — the judge explained.
Custodial-account holders have not yet received their funds due to a dispute over the status of the BIA. On November 10 the platform paused transfers between accounts, and on November 18 it made corresponding changes to the app.
BlockFi suspended withdrawals, citing the FTX and Alameda Research crisis. A few days earlier, the platform’s founder Flori Marquez assured that all of the company’s products were functioning, and the business did not depend on the firms Sam Bankman-Fried.
As previously reported, on 28 November BlockFi and eight subsidiaries filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. The FTX Group took this step on November 11.