A New Jersey judge has decided that BlockFi's custodial wallet users are entitled to receive back nearly $300 million worth of assets
BlockFi Customers Can Get $300 Million of Their Assets Returned
A New Jersey judge has decided that BlockFi's custodial wallet users are entitled to receive back nearly $300 million worth of assets that were frozen after the crypto lender filed for bankruptcy in April 2023. The judge ruled that the assets in the wallets are not part of BlockFi's estate, but belong to the clients who deposited them.
This is a relief for thousands of BlockFi customers who were unable to access their funds since the bankruptcy announcement. BlockFi, which offered high-interest loans and savings accounts using cryptocurrencies, collapsed after a series of regulatory actions and market volatility. The company faced lawsuits from creditors and investors, as well as investigations from several state regulators.
The judge's ruling allows BlockFi's trustee to begin the process of returning the assets to the custodial wallet users, who will have to verify their identities and provide proof of ownership. The trustee said that the process could take several weeks, depending on the volume and complexity of the claims. The ruling does not affect other BlockFi products or services, which remain subject to ongoing litigation.