As the U.S. bankruptcy court in New Jersey provisionally accepts its disclosure statement, the beleaguered cryptocurrency lender, BlockFi moves closer to paying back its consumers.
BlockFi’s efforts to restructure and reimburse its customers have advanced thanks to the U.S. bankruptcy court in New Jersey’s conditional approval of its disclosure statement.
Mark Renzi, Berkeley Research Group’s chief restructuring officer, expressed faith in the strategy for speeding up the restoration of crypto assets to the impacted clients. Berkeley Research Group is the parent firm of BlockFi.
However, because some parties disagreed with the bankruptcy plan, the development encountered several obstacles. BlockFi’s planned bankruptcy plan has been disputed by the discredited Sam Bankman-Fried’s FTX, Three Arrows Capital (3AC), and Gary Gensler’s Securities and Exchange Commission (SEC), raising questions about the fairness of the plan’s terms.
They contend that the proposal unfairly downgrades their claims, lacks procedural fairness, and releases BlockFi and its management from various legal obligations. Further complicating the problem are contested transactions worth over a billion dollars.
3AC Attempting to Recoup $220 Million
The liquidator of Three Arrows Capital (3AC) has made a dramatic announcement, stating that it intends to recoup $220 million in “preferential payments” granted to BlockFi.
This underscores the ongoing conflicts between BlockFi and its creditors and increases the complexity of the reorganization process. Voting for the proposed reorganization must be completed by September 11 to determine BlockFi’s future.
The outcome will decide the company’s future and capacity to reimburse customers, therefore it is a crucial time for all parties.
