Bankrupt Crypto Lender BlockFi Approved to Open Withdrawal Service for US Clients

Bankrupt crypto lender BlockFi has received approval from the bankruptcy court to allow its users to withdraw digital assets. Earlier on Thursday (August 17th), BlockFi reopened its withdrawal service, but is currently only available to customers in the United States.

The company announced the news in a post on X (formerly Facebook) and reminded customers to check their email or the BlockFi app to see if they are currently eligible for withdrawals.

BlockFi further explained in the announcement, "We expect more clients, including international clients, to become eligible to withdraw digital assets from their wallet accounts as we move forward in the court process."

Last November, a significant exposure caused by the bankruptcy of FTX brought a liquidity crisis to the crypto lender. BlockFi announced the suspension of withdrawals​ and filed for bankruptcy​ on the 28th of the same month. The following month, the company asked a U.S. court to green light customer withdrawals.

According to a document released earlier this year, as of Jan. 14, BlockFi had $415.9 million worth of assets linked to FTX and a whopping $831.3 million in loans to Alameda, with an exposure of up to $1.2 billion​. Last month, three months after filing an application for liquidation, the company finally received conditional approval​​ from a New Jersey bankruptcy court to proceed with its reorganization in an effort to pay back creditors.