Digital asset creditor BlockFi has applied to the bankruptcy court for permission to start liquidating its credit system. The petition was put forward after the company attempted to sell its platform to pay off creditors.
Such a move was expected as the sale of the BlockFi platform did not generate enough funds to pay off debts.
Lawyers representing the bankrupt creditor said that because of recent changes in regulation, selling the business would not bring in enough money to satisfy creditors.
BlockFi's legal representatives argue that the realisation of the platform deal will not result in a favourable settlement for the debtors. Therefore, the debtors have initiated a self-liquidation procedure in which their assets will be distributed to creditors in accordance with the terms of the plan.
BlockFi filed for bankruptcy protection in November after the fall of FTX. Since then, they have been trying to sell their assets. More recently, it was announced that almost $300 million will be returned to BlockFi custodial wallet users.
