BlockFi files motion in US for users to withdraw frozen crypto

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Crypto Regulation
BlockFi files motion in US for users to withdraw frozen crypto

Crypto Lending firm BlockFi has filed a motion requesting authorization from a United States bankruptcy court to enable its users to withdraw frozen crypto assets under their custody.

BlockFi inching closer to enabling withdrawals 

In a motion filed on Dec 19 with the U.S. Bankruptcy Court for the District of New Jersey, the lender applied for permission to honor client withdrawals from wallet accounts that have been frozen since Nov 10 on the platform.

Additionally, the court documents request permission to update the user interface to accurately reflect transactions since the platform’s pause.

In an email widely disseminated to affected users, BlockFi stated that it believes its clients “unquestionably own the digital assets” in their wallet accounts. It added that obtaining authorization through the aforementioned legal process is a “necessary step in ensuring all clients are treated fairly” and that it intends to honor all requests aptly.

According to BlockFi, this motion will have no impact on withdrawals or transfers from BlockFi Interest Accounts, which remain suspended at this time.

The lending platform also seeks relief from the Supreme Court of Bermuda in order to enable customers to withdraw assets from its international platform.

Swift recovery from BlockFi

Tiffany Fong, a crypto blogger, shared the communication sent to her by BlockFi on December 19, remarking that the troubled company appears to be moving much more quickly than Celsius, which filed for bankruptcy more than five months ago.

According to BlockFi, its request is likely to be considered at the upcoming hearings scheduled to take place on January 9 in the United States and January 13 in Bermuda.

BlockFi initially halted withdrawals on November 10, citing the collapse of FTX and the ensuing uncertainty as the reason for its decision.

Weeks later, The firm filed for Chapter 11 bankruptcy weeks later for the company and its eight subsidiaries on November 28. BlockFi International submitted a bankruptcy petition to the Supreme Court of Bermuda on that same day. Soon after, on November 29, the company’s first hearing began.

Because of today’s development, customers of BlockFi may soon regain access to their funds without having to go through the entire process of the company’s restructuring.

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Rony Roy

Rony Roy is an electrical engineer turned tech author in the Cryptocurrency space. He got block-chained in 2012 and fell in love with tech and its use-cases and has been writing his way through innovations in this emerging sector. Over the years, he has worked with multiple Blockchain projects and premier cryptocurrency exchanges both national and international.