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BlockFi files motion to return frozen crypto to wallet users

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2 years ago

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Crypto lender BlockFi has asked a U.S. bankruptcy court for the authority to return the crypto command in BlockFi wallets to users.

Bankrupt crypto lending platform BlockFi has filed a motion requesting authority from the U.S. bankruptcy court to permit its users to withdraw digital assets presently secured up in BlockFi wallets.

In a motion filed on Dec. 19 with the U.S. Bankruptcy Court within the District of latest Jersey, the loaner asked the court for authority to honor shopper withdrawals from pocketbook accounts that have been frozen on the platform since Nov. 10.

The court documents additionally request permission to update the computer program to properly mirror transactions as of the platform’s pause.

In a widely shared email sent to affected users, BlockFi referred to as the motion Associate in Nursing “important step toward our goal of returning assets to purchasers through our chapter eleven cases,” adding

“It is our belief that purchasers unambiguously own the digital assets in their BlockFi wallet Accounts.”

According to BlockFi, this motion won’t impact withdrawals or transfers from BlockFi Interest Accounts that stay paused at now.

The disposal platform has additionally signaled intentions to hunt “similar relief from the Supreme Court of Bermuda with relation to BlockFi wallet Accounts command at BlockFi International Ltd.”

BlockFi International could be a subsidiary of the company based in Bermuda, that runs its low-class.S. operations.

Crypto blogger  Tiffany Fong shared the communication sent to her by BlockFi on Dec. 19, commenting that the embattled firm seems to be moving abundantly quicker than Celsius, which filed for bankruptcy over 5 months past, compared to BlockFi’s bankruptcy filing in November.

According to the court documents, a hearing to determine if the motions are going to be granted is scheduled for Jan. 9.

A separate hearing relating to pocketbook accounts command at BlockFi International Ltd is scheduled to go before the Supreme Court of Bermuda on Jan. 13.

BlockFi halted shopper withdrawals and requested purchasers to not deposit to BlockFi wallets or Interest Accounts on Gregorian calendar month. 11, citing a scarcity of clarity around FTX.

By Nov. 28, BlockFi filed for Chapter eleven bankruptcy, for the corporation and its eight subsidiaries. BlockFi International filed for bankruptcy with the Supreme Court of Bermuda thereon same day.

The post BlockFi files motion to return frozen crypto to wallet users first appeared on BTC Wires.



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Federal Reserve Moves Against Evolve Bank, Is Another Regional Bank Collapse In View?

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3 weeks ago

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June 14, 2024

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The Federal Reserve has recently delivered a cease and desist order to Evolve Bank and Trust for engaging in “unsafe and unsound banking practices” and having an inadequate AML program. This has focused on the bank, especially given the recent mishaps of the financial technology firms linked with Evolve.

Evolve Bank Scrutinized by Federal Reserve

The cryptocurrency industry and the fintech sectors’ banking service provider, Evolve Bank and Trust, are set to encounter new hurdles after the Federal Reserve’s order. The bank will be required to present detailed proposals for its measures to ensure compliance with the laws on internal and anti-money laundering standards. These directives arise from apparent weaknesses in the bank’s collaborations with fintech firms, especially the recent debacle with Synapse Financial Technologies. This has caused Synapse to have different account balances, impacted fintech clients like Yotta, and added more problems to Evolve’s operations.

It has also benefited from partnerships with major crypto firms such as BlockFi and FTX. These firms have gone through a lot of pressure, and the banks have offered them much-needed financial services. For example, the bankruptcy of FTX provided that FTX had about $10 million in Evolve accounts. Also, Protos and a US Secret Service affidavit reports show that Evolve was also used by the alleged fraudsters in ‘pig-butchering’ scams, which posed another compliance and operations risk to the bank.

Fed Maintains Rates Amid Evolve Bank Issues

These are the problems that occurred at Evolve Bank and Trust. They indicate the more significant issues within the financial services industry regarding the soundness and legal permissibility of banks that are very active in the fintech and cryptocurrency space.

These recent actions by the Federal Reserve depict some of the dangers that can be posed by these partnerships to the financial systems. This way, Evolve deals with the above-listed regulatory issues, and its impact spreads across the entire fintech industry, influencing the customers’ trust and the operational environment of the fintech partners.

The Fed most recently left the benchmark federal funds rate at 5. 25% and 5. 50 % reflects the regulator’s conservative stance, especially on matters related to the economy. Speaking in New York, Federal Reserve Chairman Jerome Powell said that keeping the current interest rate is crucial to support the economic recovery of the United States even with the decrease in inflation rates. This decision aligns with the current measures to guarantee that other financial institutions, such as Evolve, are running within the acceptable standards of safe and sound banking practices.

The regulatory actions against Evolve coincide with significant legislative discussions concerning the role of the Federal Reserve. U.S. Congressman Thomas Massie’s proposed bill to eliminate the Fed reflects a growing sentiment among certain groups advocating for major reforms in the central banking system. This proposal has garnered substantial support from the online Bitcoin community, highlighting the ongoing debate over the future of monetary policy and regulation in the United States.

Also Read: Ripple CLO Criticizes Gensler’s Use of “Crypto Asset Securities”

 

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Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Alameda Research

Insights Into Alameda’s Financial Stability In FTX Trial

Published

9 months ago

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October 14, 2023

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The trial against FTX co-founder Sam Bankman-Fried took an intriguing turn as Zac Prince, the CEO of defunct crypto lender BlockFi, provided testimony in a Manhattan federal courtroom. 

Prince’s appearance provided valuable insights into the intricate relationship between BlockFi, FTX, and Alameda Research.

BlockFi’s Bankruptcy Rooted In Alameda And FTX

According to a Bloomberg report, Prince revealed that BlockFi had substantial exposure to Alameda and FTX, estimated at around $1 billion, at the time of BlockFi’s failure in November 2022. 

Prince asserted that if the loans to Alameda were still in good standing and the funds on FTX were available, BlockFi would not have filed for bankruptcy. This statement suggests that BlockFi’s financial troubles were closely tied to the collapse of Alameda and FTX.

Prince’s testimony diverged significantly from Caroline Ellison, the government’s star witness, who portrayed Bankman-Fried as the mastermind behind a fraudulent scheme using FTX customer funds for speculative trading at Alameda. 

Prince’s account positioned BlockFi as a victim of Bankman-Fried’s alleged schemes, claiming that BlockFi made loans to Alameda based on misleading balance sheets. 

Defense lawyers sought to emphasize that BlockFi willingly provided the loans to Alameda, with knowledge of the associated risks.

Creditors Accuse BlockFi Of Inadequate Due Diligence

Prince discussed BlockFi’s due diligence process regarding Alameda’s collateral, comprised of tokens affiliated with FTX. The judge requested plainer terms during Prince’s explanation, prompting an analogy using car loans. 

Per the report, the prosecution questioned the adequacy of BlockFi’s due diligence, as creditors accused the company of failing to recognize warning signs before offering substantial loans to Alameda.

Prince’s testimony highlighted that providing “unaudited balance sheets” is an industry norm for borrowers seeking loans. The defense sought to establish that BlockFi knew the risks of lending to Alameda and acted within industry norms.

Zac Prince’s testimony in the trial against Sam Bankman-Fried provided a deeper understanding of the intertwined relationships within the crypto industry. BlockFi’s exposure to Alameda and FTX and its subsequent bankruptcy offered insights into the potential repercussions of alleged fraudulent activities. 

The differing narratives presented by the prosecution and defense underscore the complexities of the case. As the trial unfolds, the court will continue to examine the details surrounding BlockFi’s lending practices and the extent of Bankman-Fried’s involvement in the alleged schemes.

It is important to note that BlockFi can no longer be utilized for crypto-related activities, as the company declared bankruptcy and suspended withdrawals in November 2022. The bankruptcy filing indicates that BlockFi owes between $1 billion and $10 billion to over 100,000 creditors.

FTX
FTX’s native token FTT downtrend on the daily chart. Source: FTTUSDT on TradingView.com

Featured image from NBC, chart from TradingView.com



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BlockFi

BlockFi to give over$ 100K in refunds to California clients

Published

1 year ago

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March 31, 2023

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At least 111 BlockFi borrowers had continued repaying loans between Nov. 11 and Nov. 22, indeed though they did not need to, according to court documents.

void crypto lender BlockFi has agreed to reimburse further than $100,000 to California guests that had continued to repay loans indeed after a trading halt on Nov. 10 last time.

In a March 27 statement, California’s Department of Financial Protection and Innovation said that its disquisition had discovered that at least 111 borrowers in California made roughly $103,471 in loan disbursements between Nov. 11 and Nov. 22.

The fiscal watchdog claimed that BlockFi failed to “ give timely announcement to borrowers that they could stop repaying their BlockFi loans. ”

The DFPI claims that borrowers weren’t notified untilNov. 22 that they could stop repaying their BlockFi Loans “ until farther notice. ”

According to documents, BlockFi requested authorization from the ruin court to return these payments to the borrowers in a stir filed with the court on Feb. 24.

The refunds will be suitable to go ahead if the stir is approved, with a hail listed for April 19.

Meanwhile, the DFPI said BlockFi has agreed to an ” interim suspense ” of its California Financing Law( CFL) license while “ the ruin and cancellation conduct are pending. ”

still, including interest and late freights and all finances paid following the November 10th platform pause, ” according to the DFPI documents, “ If this stir is granted BlockFi agrees to direct the Servicer to timely return borrowers’ payments.

Unless else ruled by the ruin court, the controller said BlockFi’s agreement to the interim suspense means it’ll continue to direct its agents to break the collection of disbursements for California guests on loans, interest payments and “ not charge, levy, or assess any late freights associated with any payments, including at maturity. ”

BlockFi has also agreed to continue not reporting to credit agencies that loans from California residents have come tardy or defaulted on or after Nov. 11, and won’t take “ any action that may harm California residents ’ credit scores on similar loans. ”

According to the DFPI, Commissioner ClothildeV. Hewlett suspended BlockFi’s lending license for 30 days onNov. 11 and moved to drop BlockFi’s CFL license onDec. 15,.

BlockFi halted customer recessions and requested guests not to deposit to BlockFi holdalls or Interest Accounts on Nov. 10, citing a lack of clarity around the collapse of FTX.

By Nov. 28, BlockFi filed for Chapter 11 ruin for the company and its eight accessories. BlockFi International filed for ruin with the Supreme Court of Bermuda on the same day.

The post BlockFi to give over$ 100K in refunds to California clients first appeared on BTC Wires.



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