![BlockFi To Liquidate Its Crypto Lending Platform After Failing To Sell 22 BlockFi To Liquidate Its Crypto Lending Platform After Failing To Sell 16](https://en.ethereumworldnews.com/wp-content/uploads/2023/05/blockfi-770x520.jpg)
- BlockFi has planned to liquidate its crypto lending platform after determining that its the best course of action for creditors.
- The bankrupt crypto lender’s decision comes after multiple unsuccessful attempts to sell the business.&
- The firm’s inability to secure a value-maximizing offer was blamed on the recent regulatory scrutiny of crypto entities.&
New Jersey-based BlockFi has announced its plans to liquidate its cryptocurrency lending platform following several unsuccessful attempts to sell the business. The bankrupt crypto lender has concluded that selling the lending business is the best course of action for its creditors and customers who have been stranded since November last year.
BlockFi’s Claims Against FTX & Alameda Will Make a $1 Billion Difference
According to a report by the Wall Street Journal, BlockFi has determined that selling the crypto lending platform will not generate enough value for the bankrupt firm’s creditors and customers. The firm laid out its reorganization plan in a recent filing made with the U.S. Bankruptcy Court for the District of New Jersey. As per the court filing, the Chapter 11 reorganization plan has been sent to the bankrupt crypto lender’s creditors and over 100,000 retail customers for a vote.
We believe that our Plan is the fastest way for clients to receive the highest recovery of digital assets and conclude the Chapter 11 cases as quickly as possible.”
Statement from BlockFi
BlockFi’s decision to initiate the self-liquidation transaction comes after back and forth with multiple potential buyers regarding a sale since January this year. The crypto lender found that a sale wouldn’t generate meaningful value for the creditors and that directly distributing assets after liquidation would extract more value for said creditors. The bankrupt crypto lender also cited the recent regulatory scrutiny of crypto entities as one of the reasons for not being able to secure a value-maximizing offer from prospective buyers.&
The amount that will be distributed to BlockFi’s creditors will depend on the outcome of pending litigation against its counterparties. The crypto lender has nearly $355 million frozen on the bankrupt crypto exchange FTX and an outstanding $671 million loan to FTX’s sister firm Alameda Research. The outcome of the lawsuits involving FTX and other counterparties, including Three Arrows Capital and crypto miner Core Scientific, will make a difference of over $1 billion in BlockFi’s recoveries and the subsequent repayment to its creditors.& &
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