Crypto lender BlockFi recently announced its emergence from insolvency, following closely behind FTX’s successful recovery of approximately $7 billion in assets. FTX debtors, including FTX and its affiliates, claim that $8.7 billion has been misappropriated from their customers. BlockFi, one of FTX’s largest creditors, has lent the exchange more than $650 million. This means that the repayment success of BlockFi’s customers is dependent on FTX’s ability to recover its assets.
The new management at FTX is exploring various options for the exchange’s future, such as selling the entire platform, including its nine million customer base, or partnering with another entity to revive the business. Independent comeback is also being considered.
Unfortunately, BlockFi has no choice but to wind down its operations, as stated in its court filings.
In this week’s Crypto Biz, we discuss BlockFi’s emergence from bankruptcy, the progress of BlackRock’s spot Bitcoin exchange-traded fund (ETF), and changes in Worldcoin’s payment scheme.
Creditors of bankrupted companies from the 2022 crypto bear market finally see a glimmer of hope. FTX and BlockFi, for example, have started to return funds to their customers after approximately a year of filing for bankruptcy.
BlackRock’s spot Bitcoin ETF listed on Nasdaq trade clearing firm — Bloomberg analyst
BlackRock’s proposed iShares spot Bitcoin ETF has been listed on the Depository Trust & Clearing Corporation (DTCC), indicating potential approval by the US Securities and Exchange Commission (SEC). Bloomberg ETF analyst Eric Balchunas commented that the DTCC listing is part of the process of bringing a crypto ETF to market. Balchunas speculates that BlackRock may have already received approval from the SEC or is preparing assuming approval. The SEC has until Jan. 10, 2024, to make a final decision on the ETF.
The iShares Bitcoin Trust has been listed on the DTCC (Depository Trust & Clearing Corporation, which clears NASDAQ trades). And the ticker will be $IBTC. Again all part of the process of bringing ETF to market.. h/t @martypartymusic pic.twitter.com/8PQP3h2yW0
— Eric Balchunas (@EricBalchunas) October 23, 2023
BlockFi emerges from bankruptcy and opens wallet withdrawals
Crypto lending platform BlockFi has emerged from bankruptcy and is now able to repay some of its creditors, as stated in a blog post on Oct. 24. Customers can currently withdraw funds from nearly all Wallet accounts, and BlockFi Interest Account and Loan customers will have access to withdraw some assets in early 2024. BlockFi’s emergence from bankruptcy allows it to pursue the recovery of assets from other companies it believes have outstanding debts, including Three Arrows Capital and FTX. The total amount distributed will depend on BlockFi’s success in FTX bankruptcy litigation and other factors.
Ledger hardware wallet releases cloud-based private key recovery tool
Despite facing criticism from the crypto community, Ledger is launching its cloud-based private key recovery solution. The paid subscription service, provided by Coincover, allows users to back up their secret recovery phrase. Ledger had paused the recovery service in May 2023 due to community backlash but decided to only launch it once the open-source code was released. The code for Ledger Recover is now available on GitHub.
Worldcoin to discontinue USD Coin payments to Orb operators
Worldcoin plans to pay its Orb Operators, individuals rewarded for scanning people’s eyes, with its native Worldcoin (WLD) token, phasing out USD Coin (USDC) as early as November. This change will impact most jurisdictions. Worldcoin views this as a transitional phase following the project’s official launch on July 24. The supply of the WLD token has grown from approximately 100 million to around 134 million since the launch, according to data from Worldcoin’s Dune Analytics dashboard.
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