Bankrupt cryptocurrency lending platform BlockFi has filed for permission from the United States Bankruptcy Court to allow its users to withdraw digital assets currently held in BlockFi wallets.
In a motion filed Dec. 19 with the US Bankruptcy Court in the District of New Jersey, the lender asked the court for authority to honor customer withdrawals from wallet accounts that have been frozen on the platform since Nov. 10.
Court documents also request permission to update the user interface to correctly reflect transactions as of the platform’s downtime.
In a widely shared email to affected users, BlockFi described the move as “an important step towards our goal of returning assets to customers through Chapter 11 cases,” adding:
“We believe customers unequivocally own the digital assets in their BlockFi Wallet accounts.”
According to BlockFi, this movement will not affect withdrawals or transfers from interest accounts from BlockFi, which remain paused at this time.
The lending platform also indicated intentions to seek “similar relief from the Bermuda High Court in respect of BlockFi wallet accounts held at BlockFi International Ltd.”
BlockFi International is a subsidiary of the company and is headquartered in Bermuda, with operations outside the United States.
Crypto blogger Tiffany Fong shared a message BlockFi sent her on December 19, commenting that the embattled company appears to be moving much faster than Celsius, which filed for bankruptcy more than five months ago, than BlockFi filed in November.
According to court documents, a hearing to decide whether to grant the motion is scheduled for January 9.
A separate hearing regarding wallet accounts at BlockFi International Ltd is scheduled to take place before the Bermuda High Court on January 13.
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BlockFi halted customer withdrawals and asked customers not to deposit into BlockFi wallets or interest accounts on November 11, citing a lack of clarity about FTX.
By November 28, BlockFi had filed for Chapter 11 bankruptcy, for the company and its eight subsidiaries. BlockFi International filed for bankruptcy with the Bermuda Supreme Court on the same day.