BlockFi wants to convert some of its crypto assets to stablecoins

BlockFi seeks to convert ALGO, BCH and DOGE holdings to stablecoins

August 30, 2023 11:05 am

Formatoriginal/Shutterstock modified by Blockworks

BlockFi submitted a request to swap its trade-only assets to the Gemini Dollar stablecoin.

The move, the bankrupt crypto lender said, would allow the assets to be withdrawn.

Currently, the assets aren’t available for withdrawal due to “practical reasons associated with the attributes of the digital coins.” The assets include Algorand (ALGO), Bitcoin Cash (BCH) and Dogecoin (DOGE). While the filing specifically names the Gemini Dollar stablecoin, it does note that the assets could be transferred to another stablecoin of the debtors’ choosing.

These cryptos comprise a small amount of BlockFi’s overall wallet assets, roughly half a percent.

Custodial partner BitGo is unable to handle the process that would be necessary to “transmit blockchain transactions” for the assets as they are.

BlockFi’s committee of unsecured creditors is in support of the request.

The move comes after BlockFi initiated certain withdrawals earlier this month, after building a new product functionality in order to process the withdrawals on the platform.

Prior to the opening of certain withdrawals, the SEC said that it would “forego” the $30 million BlockFi penalty until investors are repaid. The SEC charged BlockFi a $50 million penalty in February of last year, penalizing the lender for allegedly selling BlockFi Interest Accounts (BIAs) to the public.

The crypto lender declared bankruptcy in November of last year following the collapse of FTX, it instituted a “Platform Pause” back on Nov. 10, 2022, freezing assets on its site.

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