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BlockFi Creditors Push for Chapter 11 Trustee Amid Allegations of Fraud and Broken Promises

June 28 (Cointime) - BlockFi's Official Committee of Unsecured Creditors has filed a court document calling for a Chapter 11 trustee to be appointed, exclusivity periods to be terminated, or the cases to be converted to Chapter 7 proceedings. The UCC claims that BlockFi customers do not have a clear understanding of what happened, which is "facilitating case mischief."

The UCC also alleges that BlockFi's former CEO, Zac Prince, perpetrated a fraud on customers and that debtors broke their promises by liquidating nearly $240 million in customers' crypto. The court could also convert the case to a Chapter 7 case, allowing for the liquidation of a debtor's nonexempt property and the distribution of the proceeds to creditors.

BlockFi Fraud Liquidation
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