BlockFi Sets New Standard for Bankruptcy Transparency

The bankruptcy proceedings for BlockFi and FTX are nearing their conclusions, though their approaches have been notably different.

BlockFi’s case has been praised for its clarity and efficiency, with the company providing detailed reports on its assets, which helped expedite the process.

In contrast, FTX is still navigating some challenges, with a critical hearing for its reorganization plan expected next month. Although creditors have supported the plan, it’s not without controversy, and FTX’s bankruptcy could be settled by the end of the year.

BlockFi, on the other hand, is in the final stages of its bankruptcy process, with its plan already confirmed. Legal experts have pointed to BlockFi’s transparency as a model for future cases, contrasting it with FTX’s more opaque handling. Both companies faced disputes over how to repay creditors—whether in cash or cryptocurrency.

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FTX opted for cash distributions, despite some pushback from creditors who preferred crypto, while BlockFi couldn’t meet demands for crypto repayments due to a shortage of digital assets.

The differing outcomes raise questions about whether existing bankruptcy laws are sufficient for handling crypto-related cases. Some argue that the current legal framework worked well in BlockFi’s case, while others believe new, crypto-specific regulations are necessary.

Alexander Zdravkov