One of the companies that suffered the most from last year’s bear market is BlockFi. This was one of the first companies to go bankrupt, after which it was taken over by FTX. Unfortunately, this company also went bankrupt, so it is still struggling with the same problem. Now customers can still get part of the money back – but at the same time not another part.
Some BlockFi customers get a refund
This has been decided by the court in the bankruptcy proceedings. BlockFi itself wants to return money to its customers, but there are many parties who want their money back. Creditors in particular are given priority in this regard. Still, regular investors who had an account can get money back, writes Bloomberg.
However, there is a catch. It only concerns the money in wallets that belong to the custodian are. It represents BlockFi’s customers, not BlockFi itself. That means that customers can get a total of $ 300 million back. However, it is not entirely clear how large this part of the total is. When the platform went bankrupt in November, the debt to a single company was already $ 730 million.
We also know which customers cannot get their money back. BlockFi offered interest accounts that allowed customers to earn returns on their crypto. The judge has now decided that the money that was in the associated wallets does belong to BlockFi, and that customers cannot get this money back. These wallets contained approximately $375 million.
BlockFi had been struggling for a long time
BlockFi was one of the first companies to go under. It was already suffering from the problems with the Terra (LUNA) ecosystem and the investment fund Three Arrows Capital (3AC). It seems that it had money with the latter, as soon after BlockFi announced that it had withdrawn loans from a major client. That was probably Three Arrows Capital.