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BlockFi is seeking more ways to return the users’ funds.
BlockFi, a now-defunct digital asset lender, requested the court to facilitate the withdrawal of trade-only assets that would further the effort to return users’ funds.
According to the court filing, BlockFi wished to make a one-time exchange of the trade-only assets, enabling clients to gain access to these otherwise locked-up funds.
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The specific trade-only assets in the document are identified as Algorand (ALGO), Bitcoin Cash (BCH), and Dogecoin (DOGE). BlockFi proposes a one-time exchange of these assets for Gemini Dollar (GUSD) or other stablecoin.
Such an exchange would enable users to withdraw funds using BitGo, a custodial partner in this case. Trade-only assets currently amount to only 0.5% of all U.S. wallet assets of BlockFi users.
BlockFi explained that, at the moment, BitGo cannot give the users access to trade-only assets:
The Trade Only Assets are not currently available for withdrawal for practical reasons associated with the attributes of the digital coins, including that BitGo does not have the ability to facilitate the process required to transmit blockchain transactions for these Trade Only Assets with the current integrations to BlockFi.
In the court filing, BlockFi mentions that this permission would be in the best interest of all parties.
The company filed for bankruptcy in 2022 and temporarily suspended the withdrawal of funds. Earlier this month, BlockFi reopened its platform to allow withdrawals from eligible customers. It is estimated that BlockFi could potentially owe up to $10bn to more than 100,000 creditors.
The United States Bankruptcy Court also gave the company conditional approval for its disclosure statement.
Having completed a Master’s degree on Economics, Politics & Culture for the East Asia region, Aaron has written scientific papers with a comparative analysis of the differences between US’ Western and Japan’s Collective forms of capitalism, 1945-2020.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
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