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- The request filed by the crypto lender on March 21 seeks a new deadline to submit a restructuring plan.
- Judge Michael Kaplan suggested BlockFi submit its plan by May 11.
BlockFi, the bankrupt crypto lender, has reportedly been granted a 48-day extension to file its exit plan. According to the company’s attorney Joshua Sussberg BlockFi is potentially selling companies assets and seeking some outside who can back the restructuring deal.
According to documents, debtors must propose a Chapter-11 exit plan within 120 days of filing. Although the court instructed BlockFi to present their plan by March 27, on March 21, the lender filed a request letter in court seeking an extension in submission dates by 90 days to June 26.
The extension of the filing exit plan was granted by Judge Michael Kaplan, who believes that giving an extension will ease the way for the smooth continuation of the issue, as per reports of TheCoinRepublic BlockFi filed for Chapter-11 protection with the United States Bankruptcy Court for the District of New Jersey.
The Judge refused the request and gave a shorter deadline than the bankrupt lending firm asked.
Regarding the date extension, Sussberg said there’s lots of work still to be done because of the scale and complexity of Chapter 11. The available data states that the crypto lender owes around $10 billion to over 100,000 users.
The BlockFi’s user committee argued in court that they should be given permission to take over the bankruptcy case so that cryptocurrency stuck in accounts can be immediately returned to the affected holders.
The court filing states that most creditors lost their life savings and still believe they might get them back. The entire crypto market is in trouble after Terra(Luna) crashes and crypto winters. Although the market quickly improved, the collapse of the third biggest crypto exchange, FTX, has shown significant downtrends in the last few days.
BlockFi and FTX Connections
BlockFi’s connection with FTX was much bigger than that of the report suggested before. The lender reportedly had over $1.2 billion in assets linked with Sam Bankman’s FTX.
Earlier in January 2023 Attorney of BlockFi revealed that the loan to Alameda was estimated at $671 million. At the same time, $355 million in virtual assets was struck on the FTX exchange. FTX and its trading arm Alameda went for bankruptcy in November 2022, which lurched in the crypto markets.
Alameda Research was headed by Caroline Ellison, the so-called girlfriend of FTX founder and Chief Executive Officer Sam Bankman Fried. FTX partially collapsed on 9 November 2022, and a day after that, Bloomberg delisted Sam Bankman-Fried from the global billionaire list.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
