Crypto lender BlockFi gets court nod for plan to repay customers

The customers of bankrupt cryptocurrency lending platform BlockFi are one step closer to being paid out after a United States Bankruptcy Court in New Jersey approved its liquidation plan.

Bankruptcy Judge Michael A. Kaplan approved BlockFi’s third amended Chapter 11 plan in a Sept. 26 court hearing, a filing on the same day shows.

Sept. 26 court filing in the bankruptcy case of BlockFi. Source: Kroll

The amount of repayment received by BlockFi’s unsecured creditors will largely depend on whether BlockFi succeeds in its legal battle against FTX and other bankrupt cryptocurrency firms.

BlockFi’s liquidation plan was approved after the firm settled a long-fought dispute with the creditors committee over the company’s senior management.

The now bankrupt lending platform blamed FTX’s collapse for its own failure despite the creditor’s committee citing concerns with BlockFi’s relationship with FTX and its former CEO Sam Bankman-Fried.

Estimates show BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to bankrupt crypto hedge fund Three Arrows Capital.

This is a developing story, and further information will be added as it becomes available.

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