BlockFi's Bankruptcy Progress: US Court Conditionally Approves Disclosure Statement

Crypto lender BlockFi, currently undergoing reorganization, receives conditional approval for its disclosure statement from the US Bankruptcy Court in New Jersey. The approval signals continued progress in BlockFi's Chapter 11 bankruptcy filing process, aiming to maximize creditor recoveries. Mark Renzi, BlockFi's Chief Restructuring Officer, emphasizes the lender's commitment to maximizing creditor returns and views the approval as a significant step toward achieving that goal. The conditional approval marks progress towards returning crypto assets to clients and urges them to vote in favor of the plan. BlockFi's proposed bankruptcy plan includes efforts to recover funds from defunct entities like Alameda, FTX, 3AC, Emergent, Marex, and Core Scientific. This strategy aims to protect client interests and prevent dilution caused by third-party claims. However, the proposed plan faces opposition from FTX, Three Arrows Capital, and the Securities and Exchange Commission (SEC). The plan provides clients with the option for releases, exempting them from potential claims by BlockFi. This release applies to most clients, except those who withdrew $250,000 or more from BlockFi Interest Accounts (BIA) or BlockFi Private Client (BPC) Accounts after November 2, 2022. The proposed reorganization plan is scheduled for a vote on September 11. BlockFi's conditional approval represents a crucial step toward its reorganization efforts and illustrates the complex dynamics of navigating bankruptcy proceedings in the crypto industry.