BlockFi to Start Crypto Distributions to Creditors Through Coinbase This Month
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- Bankrupt crypto lender, BlockFi will start distributing interim crypto funds to creditors via Coinbase this month.
- Due to regulatory issues, non-US clients of BlockFi will not receive funds at this time.
- Withdrawals will start with wallet customers, followed by BlockFi Interest Account (BIA) and loan customers.
Bankrupt crypto lender BlockFi has recently announced that it will begin interim crypto distributions to creditors through Coinbase starting this month.
“The distributions will be processed in batches in the coming months, and eligible clients will receive a notification to the BlockFi account email on file,” the company wrote on Wednesday.
The company has mentioned that non-US Clients cannot receive funds now due to the regulatory requirements applicable to them.
Founded in 2017 by Zac Prince and Flori Marquez, BlockFi was the first to be affected by FTX’s collapse in early November 2022. They filed for Chapter 11 bankruptcy on November 28, 2022, after halting withdrawals. BlockFi then sought court approval to release customer funds.
By September 2023, creditors approved BlockFi’s bankruptcy restructuring plan. In early 2024, BlockFi settled with FTX and Alameda Research for nearly $1 billion, moving closer to fully recovering customer funds.
According to BlockFi’s announcement, it is partnering with Coinbase to distribute funds to creditors. Withdrawals will start with wallet customers, followed by BlockFi Interest Account (BIA) and loan customers. BIA holders might recover between 39.4% and 100% of their funds, depending on the FTX bankruptcy outcome and BlockFi’s equity in Robinhood.
As of July 2024, BlockFi customers are still waiting for the interim payments the company promised. Wallet customers have been able to withdraw funds, but BIA and loan customers haven’t received any repayments yet. The timing and amounts of these payments are still unclear due to the complicated legal issues around FTX’s bankruptcy.
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