BlockFi Petitions to Restore Frozen Cryptocurrencies of Wallet Users

BlockFi cryptocurrency lending platform has filed an application with a United States bankruptcy court for permission to recover customers’ crypto assets that were stored in BlockFi wallets.

Defunct cryptocurrency lending platform BlockFi has filed a petition with a bankruptcy court in the United States, demanding permission to allow its clients to withdraw digital assets that are now stored in wallets provided by BlockFi.

The lender asked the court for power to recognize customer withdrawals from wallet accounts that have been locked on the platform since November 10. The application was filed on December 19 with the United States Bankruptcy Court for the District of New Jersey.

Additionally, authorization is requested in the judicial process to update the user interface in order to accurately represent the transactions since the stoppage of the platform’s operations.

BlockFi called the move an “essential step toward our goal of recovering funds for clients through our Chapter 11 proceedings” in a widely circulated email to affected users.

According to BlockFi, the suspension that has been placed on the processing of withdrawals and transfers from BlockFi’s interest accounts will not be lifted as a result of this action.

The online lending platform has also made it clear that it intends to seek similar remedies from the Bermuda Supreme Court in relation to BlockFi wallet accounts that are stored at BlockFi International Ltd.

According to paperwork filed with the court, there will be a hearing on January 9 to determine whether or not the request will be granted.

On January 13, the Bermuda Supreme Court will hold a separate hearing on the wallet accounts held at BlockFi International Ltd.

On November 11, BlockFi recommended that customers refrain from depositing funds into their BlockFi wallets or interest accounts, citing a lack of clarity about FTX as the reason for the request.

On November 28, BlockFi filed for Chapter 11 bankruptcy, which included its eight companies.

On the same day, BlockFi International filed for bankruptcy with the Bermuda Supreme Court.

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