Cryptocurrency lender, BlockFi, has been granted a 48-day extension until May 15 to file an exit plan after filing for bankruptcy in November 2022. The firm’s lawyer, Joshua Sussberg, revealed in a hearing on Wednesday that BlockFi is exploring the possibility of selling company assets or securing an outside backer to support a restructuring deal.
BlockFi’s bankruptcy filing was the result of a dispute with the US Securities and Exchange Commission (SEC) over the legality of its interest-bearing accounts. The SEC had claimed that the accounts were unregistered securities, and BlockFi had been offering them in violation of securities laws. The crypto firm has since suspended the accounts, but the legal battle continues.
The bankruptcy filing has also resulted in the freezing of customer accounts, causing concern among BlockFi’s users. However, the firm has assured its customers that their funds are safe and that it is working to resolve the situation as soon as possible.
BlockFi’s troubles come at a time when the cryptocurrency industry is facing increased scrutiny from regulators. The SEC has been cracking down on unregistered securities offerings, and the recent surge in the price of Bitcoin has led to concerns about market manipulation.
Despite these challenges, many in the industry remain optimistic about the future of cryptocurrency. The technology has the potential to revolutionize finance, and many believe that it will eventually become a mainstream asset class. However, for this to happen, the industry will need to address regulatory concerns and improve its reputation.
In the case of BlockFi, it remains to be seen what the future holds. The firm’s fate will likely depend on its ability to navigate the legal challenges it faces and find a way to continue operating. For now, its customers will have to wait and see what happens next.