Bankrupt cryptocurrency lender BlockFi plans to liquidate its cryptocurrency lending platform after concluding that selling the business to a new owner wouldn’t generate enough value for its creditors, WSJ Pro Bankruptcy reported. Jersey City, N.J.-based BlockFi outlined its chapter 11 plan of reorganization, which will be sent to creditors — including more than 100,000 retail customers — for a vote, in a document filed Friday with U.S. Bankruptcy Court in Trenton, N.J. The company said that after having engaged with potential buyers to solicit a sale of its digital-assets platform and about 660,000 client accounts since January, it concluded that a sale might not generate meaningful value for creditors. The company cited recent regulatory developments as one reason that it didn’t receive value-maximizing offers from prospective buyers. BlockFi said how much clients will recover largely depends on the outcome of pending litigation against its commercial counterparties, including crypto exchange FTX and trading firm Alameda Research, both founded by Sam Bankman-Fried, as well as cryptocurrency hedge fund Three Arrows Capital and crypto miner Core Scientific. The success or failure of these lawsuits “will make a difference in excess of $1 billion to clients,” BlockFi said in the filing.
