BlockFi creditors have slammed the firm for selling their crypto assets “at the nadir” before the bankruptcy.
“Liquidating nearly all domestic cryptocurrency in November 2022 was a very poor decision,” the creditors said, arguing that the decision cost more than $100 million in the months since. The creditors also cited “unnecessary and undesired tax consequences,” also noting that the amount of the sale didn’t have any relation to its bankruptcy. The filing reads:
“Selling $240 million in cryptocurrency was never rationally related to bankruptcy funding needs, given that no reasonable estimate would peg the costs of this bankruptcy at $240 million.” BlockFi customers went on to say that the company spent $22.5 million of customer money to buy a $30 million insurance policy. According to the creditors, that happened soon after BlockFi sold out the digital assets but before filing for bankruptcy.
The plaintiffs called on the court to end the case as soon as possible by passing the estate assets “into the hands of new management.” The creditors again noted that such a scenario seems not to be consistent with the debtors’ case agenda. BlockFi didn’t immediately respond to Cointelegraph’s request to comment. This article will be updated pending new comments.
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