BlockFi Seeks Court Approval to Convert Users’ “Trade-Only” Wallet Assets to Withdrawable Stablecoins

Last updated:
Author
Author
Sujha Sundararajan
About Author

Sujha has been recognised as 🟣 Women In Crypto 2024 🟣 by BeInCrypto for her leadership in crypto journalism.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: Pixabay / Sang Hyun Cho

Bankrupt crypto lender BlockFi has filed a motion for order in the US bankruptcy court for the District of New Jersey, seeking permission to convert “trade-only” wallet assets into stablecoins, “that wallet users could then withdraw.”

According to the proposal, these assets comprise less than one-half of a percent (0.5%) of all wallet addresses of BlockFi users in the US. The assets include Algorand (ALGO), Bitcoin Cash (BCH), and Dogecoin (DOGE).

Simply put, trade-only tokens are available to trade on different markets on Spot and Margin, however, their wallets are disabled.

BlockFi states that these assets are currently not available for withdrawal due to practical limitations. As a result, the troubled crypto lender suggests a one-time exchange of the trade-only assets for Gemini Dollar (GUSD) or other stablecoins of BlockFi’s choosing.

Digital assets including Cardano (ADA), Solana (SOL), Avalanche (AVAX), Polygon (MATIC), and other trade-only assets are being held separately by BlockFi International.

“[The move] will allow for a comprehensive withdrawal process for all wallet assets.”

A hearing date for the appeal hasn’t been announced yet. BlockFi will provide prior notice to affected clients that hold trade-only assets.

BlockFi Permits Crypto Withdrawals

The New Jersey-based company, on Aug. 17, announced that it is enabling crypto withdrawals for eligible user wallets in the US in a move to comply with the court order.

At the time, ‘eligible clients’ include U.S.-based BlockFi Wallet account holders who did not withdraw or transfer over $7,575 worth of crypto assets like Bitcoin (BTC) and Ether (ETH) and did not hold any trade-only assets.

BlockFi has also recently challenged the infamous FTX exchange, Three Arrows Capital (3AC), over a re-payment dispute. Per the court filing last week, BlockFi accused both the firms of victimizing the company, claiming that they are not entitled to $5 billion that they are still recovering.

More Articles

Bitcoin News
Bitcoin Analyst PlanB Moves Entire BTC Holdings to Spot ETFs for “Peace of Mind”
Ruholamin Haqshanas
Ruholamin Haqshanas
2025-02-16 10:12:34
Altcoin News
Pantera Capital’s Dan Morehead Under Federal Tax Investigation After Move to Puerto Rico
Ruholamin Haqshanas
Ruholamin Haqshanas
2025-02-16 10:10:26
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors