BlockFi Effort to Return Crypto Paused by Fight Over Wallets (1)

BlockFi Inc. slowed down its effort to give certain digital coins back to customers while the bankrupt company negotiates with creditors over who can immediately recover their assets.

US Bankruptcy Judge Michael Kaplan agreed to put on hold BlockFi’s request to return cryptoassets held in customer wallets. The company will try to settle with creditors who have opposing views on key issues, including whether some crypto in customer wallets should be seized because the demand to return those assets is inappropriate bankruptcy claims.

An official committee of creditors has proposed holding back assets that were put into wallets within 90 ...