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Email from Blockfi – BlockFi Wallet Account Withdrawal

On May 17, 2023, the United States Bankruptcy Court for the District of New Jersey (the “Court”) entered the Wallet Order. A link to download a PDF copy of the Wallet Order can be found here. On June 9, 2023, the Supreme Court of Bermuda entered a similar order with respect to BlockFi International Ltd.

This Order provided clarity that:

1. Clients own the digital assets held in their BlockFi Wallet accounts;
2. BlockFi could update the user interface to accurately reflect transactions and client account balances as of the Platform Pause (On November 10, 2022, at 8:15 P.M. ET (i.e., November 11, 2022 at 1:15 UTC)); and
3. BlockFi could begin permitting withdrawals of digital assets that are not subject to potential preference claims from BlockFi Wallet accounts. Since the entry of the Wallet Order, the BlockFi team has been working expeditiously with the Unsecured Creditors Committee to begin releasing client funds in BlockFi Wallet accounts. To facilitate these withdrawals accurately and safely, we need to update the User Interface to properly reflect transactions and assets held in Client accounts as of the Platform Pause and to build new product functionality into the BlockFi platform. We anticipate that this work and the necessary testing will be completed this summer. At that time, we will be in a position to begin allowing clients to withdraw digital assets held in BlockFi Wallet accounts that are not subject to potential preference claims.

Making distributions as quickly, efficiently, accurately, and safely as possible is our top priority. Withdrawals from BlockFi Wallet accounts will be conducted in batches and you will receive an email when you are eligible to begin withdrawals. We will be providing additional information about the withdrawal process as it approaches.

In the interim, we encourage clients to set up an external wallet address, which will be necessary to facilitate a withdrawal of digital assets from the BlockFi platform. You will be able to make withdrawals to third party provider addresses of your choice, subject to BlockFi’s Terms of Service, while performing your own due diligence to ensure that your assets are transferred safely and securely.

Additional information regarding BlockFi’s chapter 11 cases can be found by visiting Kroll’s website at: https://restructuring.ra.kroll.com/blockfi. Clients may contact Kroll at (888) 773-0375 (Toll Free) or (646) 440-4371 (International), or email blockfiinfo@ra.kroll.com.

Frequently Asked Questions

What’s the timeframe for withdrawals?
BlockFi received approval from the Court on May 17, 2023 to update the User Interface to accurately reflect transactions and client account balances as of the Platform Pause. Since that time, BlockFi has been working diligently to update the User Interface accordingly, which is a necessary step to facilitate client withdrawals.

In addition, BlockFi needs to build new product functionality and make changes to the platform in order to process these withdrawals. We anticipate that this work and the necessary testing will be completed this summer. At that time, we will be in a position to begin making distributions to clients.

Will I be able to withdraw cash instead of digital assets from my BlockFi Wallet account?
At this time, BlockFi intends to allow clients to withdraw digital assets from BlockFi Wallet accounts to external wallets and will not be facilitating cash distributions.

Will all clients get to withdraw at once?
Withdrawals from BlockFi Wallet accounts will be conducted in batches and you will receive an email when you are eligible to begin withdrawals. We will be providing additional information about the withdrawal process as it approaches.

How do I withdraw digital assets to an external wallet?
We encourage clients to set up an external wallet address, which will be necessary to facilitate a withdrawal from the BlockFi platform. You will be able to make withdrawals to third party provider addresses of your choice, subject to BlockFi’s Terms of Service, while performing your own due diligence to ensure that your assets are transferred safely and securely.

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