BlockFi Inc. Gets Extension on Submitting Chapter 11 or Restructuring Plan

04/20/2023 02:42 • Metaverse Matters • 73 views

According to reports, a bankruptcy judge in New Jersey has extended the deadline for crypto lending company BlockFi Inc. to submit its Chapter 11 or restructuring plan to May 15th. The judge stated that a brief delay is worth it to ensure the smooth operation of the case.

US judge approves extension of BlockFi restructuring deadline to May 15th

The world of cryptocurrency is constantly evolving, and so are the companies that deal with this digital currency. One such company, BlockFi Inc., has recently faced some challenges that have led to a delay in submitting its Chapter 11 or restructuring plan. Let’s take a closer look at the situation and what it means for BlockFi and its clients.

Background

BlockFi Inc. is a crypto lending company that offers its clients the ability to earn interest on their digital assets. The company has been in operation since 2017 and has rapidly grown in popularity due to the increasing demand for cryptocurrencies. However, in late 2020, BlockFi faced some difficulties that began to raise concerns for its clients.
The company’s core business model of using clients’ cryptocurrency to make loans to institutions such as hedge funds began to heavily rely on stablecoins, which are pegged to the US dollar. This resulted in a liquidity mismatch, as there was an imbalance in the amount of stablecoins BlockFi had versus the amount of loans it had outstanding. As a result, the company was forced to make changes to its interest rate structure.

Chapter 11 or Restructuring Plan

On March 19, 2022, BlockFi Inc. filed for Chapter 11 bankruptcy in New Jersey. Chapter 11 bankruptcy is a type of bankruptcy that allows a company to restructure its debts and operations with the goal of becoming profitable again. The news came as a shock to many of the company’s clients, who were unsure of what would happen to their assets and interest earnings.
However, in a recent update, a bankruptcy judge in New Jersey extended the deadline for BlockFi to submit its Chapter 11 or restructuring plan to May 15th. The judge stated that a brief delay is worth it to ensure the smooth operation of the case.

Impact on Clients

The delay in submitting the Chapter 11 or restructuring plan has left many of BlockFi’s clients with mixed feelings. While the extension provides the company with more time to come up with a viable plan, it has also left some clients feeling uncertain about their assets.
It is important to note that BlockFi has stated that all client assets are safe and have not been impacted by the company’s financial troubles. The company has also stated that it is committed to ensuring that its clients are not adversely affected by any restructuring or bankruptcy proceedings.

Conclusion

The world of cryptocurrency can be unpredictable, and companies such as BlockFi Inc. are not immune to financial difficulties. As the company continues to navigate its Chapter 11 or restructuring proceedings, it is important for clients to stay informed and exercise caution. While BlockFi has reassured its clients that their assets are secure, it is always wise to prepare for the unexpected.

FAQs

1. Will BlockFi’s Chapter 11 filing affect my cryptocurrency holdings and earnings?
– No, BlockFi has stated that all client assets are safe and have not been impacted by the company’s financial troubles.
2. What is the difference between Chapter 11 and Chapter 7 bankruptcy?
– Chapter 11 bankruptcy allows a company to restructure its operations and debts with the goal of becoming profitable again, while Chapter 7 bankruptcy involves the liquidation of a company’s assets.
3. How can I stay informed about BlockFi’s bankruptcy proceedings?
– You can stay informed by following BlockFi’s official channels or seeking the advice of a financial advisor.
#

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/04/20/blockfi-inc-gets-extension-on-submitting-chapter-11-or-restructuring-plan/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.