Judge says BlockFi customers can be refunded $300 million from custodial wallets: CoinDesk
Quick Take
- BlockFi customers can be refunded early $300 million, after a bankruptcy judge said assets in custodial wallets belong to clients, not the troubled company.
- The judge ruled against repaying another $375 million in BlockFi’s interest-bearing accounts, however.
BlockFi custodial wallet users can receive nearly $300 million after a bankruptcy judge ruled that the wallets belong to clients, not the troubled crypto lender.
Judge Michael Kaplan weighed in on the months-long dispute over customer wallets during a hearing in the U.S. Bankruptcy Court for the District of New Jersey, CoinDesk reported.
“The court finds that all digital assets held by the debtors in custodial omnibus wallets are indeed client property, and not property of the bankruptcy estates, subject, of course, to possible avoidance and clawback rights,” Kaplan said.
The judge ruled against BlockFi repaying $375 million in funds that clients tried to withdraw from interest-bearing accounts, saying that “no transfer request by customers between the BIA and the custodial wallet accounts initiated after 8:15 p.m. on Nov. 10, 2022 were effectuated and completed.”
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