BlockFi plans to liquidate its lending platform and distribute funds to creditors, according to a bankruptcy court filing.
The expected move follows an unsuccessful effort to generate funds to repay creditors by selling the BlockFi platform, court papers say. Lawyers for the bankrupt crypto lender wrote that "given recent regulatory developments, among other things, there may be a lack of meaningful value to be generated from a sale."
"Therefore, finalizing and consummating a transaction for the BlockFi Platform would not result in an expedient and value-maximizing transaction for the benefit of the Debtors’ creditors," BlockFi's lawyers wrote. "Accordingly, the Debtors are proceeding with the Self-Liquidation Transaction whereby the Debtors will distribute their assets to creditors in accordance with the terms of the Plan, followed by a Wind Down of their affairs."
BlockFi filed for bankruptcy protection last November after the collapse of FTX. Since then, it has been working to sell off valuable parts of its business operations, including its cryptocurrency mine.
The filing, dated May 12, suggested BlockFi could still pursue "an alternative transaction providing for the sale of all, or substantially all, of the Debtors’ assets." The bankruptcy court must now approve the plan before it moves forward.
The Wall Street Journal first reported the liquidation plan news.
The full court filing can be found below:
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