Customers of the crypto lender BlockFi have taken the first step in their attempt to recover some of their assets after the firm filed a disclosure statement with the Bankruptcy Court of New Jersey. BlockFi filed for bankruptcy protection back in November last year due to certain crypto loans that it had with the company Alameda Research whose platform was FTX. The issue was that BlockFi's cryptocurrencies, which were held in FTX's platform, couldn't be recovered. In their disclosure statement, BlockFi expressed that they documented what money they had and could recover from FTX/Alameda, so this would possibly be the same amount that their clients could get back.

The filing was accompanied by a notice to commence with the solicitation process on June 20. The creditors of BlockFi would then vote on accepting the plan. However, it is not only the clients of BlockFi who are affected by this situation. Many crypto businesses who had their assets on the platform of FTX and several crypto funds and investors have been greatly affected as well.

FTX has their own battle in court to recover their losses too. They are trying to reclaim nearly $4 billion from the crisis that occurred with Genesis. FTX lawyers demanded payments of loan that were done 90 days before the collapse of their companies. To counter this claim, Genesis must discredit the allegations that the repayments were not done through traditional debt collection practices.

A recent disclosure by the IRS further complicates the situation. The Internal Revenue Service is claiming priority in the case asserting that repaying of taxes comes before assuaging the creditors. They estimate that FTX owed the agency around $44 billion.

Overall, it is uncertain how long it will take for BlockFi and other companies affected to recover the losses they have suffered, however the aforementioned legal issues could possibly delay the proceedings even more.



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