BlockFi gets court permission to return $297 million to Wallet customers

FILE PHOTO: BlockFi logo is seen in this illustration, November 28, 2022. REUTERS/Dado Ruvic/Illustration

NEW YORK (Reuters) - Bankrupt crypto lender BlockFi received court permission on Thursday to return $297 million to customers with non-interest-bearing accounts, without repaying customers who had tried to move funds into those accounts at the last minute.

U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey ruled that customers owned their deposits in BlockFi's Wallet program, which did not pay interest and kept customer deposits separate from BlockFi's other funds. Customers who had interest-bearing accounts did not own their deposits, which were turned over to BlockFi for use in its broader lending business, Kaplan ruled.