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BlockFi’s Chapter 11 Recovery Plan

In an email to account holders, BlockFi announced that on Tuesday, September 26, 2023, the company had successfully secured confirmation for its Chapter 11 Plan, marking a crucial step towards its financial recovery.

It said over 90% of stakeholders approved its bankruptcy plan across all voting classes, including backing from BlockFi management and the Unsecured Creditors’ Committee (UCC).

The confirmation of the Chapter 11 Plan followed months of work by BlockFi’s management and advisors in collaboration with the UCC.

What’s In BlockFi’s Chapter 11 Plan

BlockFi and the Unsecured Creditors’ Committee say the newly approved plan has the following key objectives:

  1. Recoveries: The company aims to recover assets it believes are owed to it by entities such as FTX and 3AC (companies that are also going through bankruptcy proceedings).BlockFi says success in these litigation efforts could potentially result in increased client recoveries, dependent on product types and jurisdiction.

  2. Withdrawals: The distribution of digital assets back to clients, including BlockFi Interest Account (BIA) holders, will continue under the Plan.

  3. Claims: The claims process will persist to ensure clients receive the correct amount of assets owed to them while addressing any erroneous claim amounts.

Implications for BlockFi Clients

The confirmation of the Chapter 11 Plan and the opening of withdrawals to non-US account holders signifies that BlockFi is approaching the final stages necessary to initiate the winding-down process.

The timing of BlockFi’s exit from bankruptcy is contingent on several factors, including recognition by the Bermuda court, which oversees international clients, of the U.S. bankruptcy court’s approval of the plan.

Upon the establishment and passing of an effective date, BlockFi will officially emerge from bankruptcy and commence implementing the actions detailed in the Plan.

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