Cryptocurrency lender BlockFi has filed a proposed court docket order searching for approval to transform sure consumer property into withdrawable funds as a part of its ongoing chapter proceedings.
The corporate utilized to chapter court docket on Aug. 30, requesting authorization to change restricted cryptocurrency holdings often known as “commerce solely” property into stablecoins. Based on the submitting, the trade-only property comprise lower than half a % of all consumer funds BlockFi holds, together with Algorand, Bitcoin Money, and Dogecoin.
BlockFi states that technical limitations stop purchasers from withdrawing the trade-only property of their unique type. If accredited, the proposed order would enable a one-time conversion of the property into Gemini Greenback or different stablecoins of BlockFi’s selecting. Purchasers might then withdraw the stablecoin funds via BlockFi’s platform.
The corporate says the transfer is critical to facilitate a complete withdrawal course of for all consumer property held in custody. Earlier court docket orders reopened the BlockFi platform to consumer withdrawals final week.
A listening to date has not been set. The proposed order requires advance discover to affected purchasers holding trade-only property.
BlockFi and associated entities filed for Chapter 11 chapter safety in late November. The cryptocurrency lender cited publicity to failed hedge fund Three Arrows Capital and volatility in crypto markets as causes for the submitting.
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