BlockFi will notify eligible clients via email in July, urging them to update their email addresses to avoid delays, with the process continuing in batches.
Bankrupt crypto lender BlockFi announced it will start its first interim crypto distributions through Coinbase this month. This move is part of a partnership with Coinbase to handle these distributions systematically and efficiently.
As described in our previously announced Coinbase distribution partnership blog post (https://t.co/M0T56YiKAe), BlockFi will commence first interim crypto distributions through Coinbase in July 2024.
— BlockFi (@BlockFi) July 17, 2024
In a post on X, BlockFi shared its distribution plans. The process will begin in July and will continue in batches over the next few months. Eligible clients will receive notifications via the email linked to their BlockFi accounts. BlockFi urged clients to update their email addresses to avoid delays in receiving these notifications.
Non-US clients face a significant restriction due to regulatory requirements and cannot receive funds now. BlockFi explained that this limitation is necessary to comply with current laws and regulations, and they are working on finding solutions for affected clients in the future.
BlockFi’s Bankruptcy Filing
BlockFi filed for bankruptcy after FTX collapsed in November 2022. BlockFi announced its shutdown and a plan to refund customers’ digital currency holdings, setting a deadline of April 28, 2024, for withdrawal requests. BlockFi partnered with Coinbase to help clients access and withdraw funds as it prepared to shut down its web platform.
In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 repayment plan to settle debts with about 10,000 creditors. BlockFi’s total liabilities range from $10 billion, including $1 billion owed to its three largest creditors and $220 million to the now-bankrupt crypto hedge fund Three Arrows Capital. This approval marked a significant step towards resolving BlockFi’s financial obligations and moving forward.
During Sam Bankman-Fried’s criminal trial, BlockFi’s CEO, Zac Prince, testified as a government witness, blaming the FTX founder’s actions for BlockFi’s bankruptcy. Prince’s testimony highlighted the impact of FTX’s collapse on BlockFi and underscored the broader consequences of the events leading to their bankruptcy.
In March 2024, BlockFi reached an $875 million agreement with the estates of FTX and Alameda Research. This settlement resolved BlockFi’s claims against FTX, which totaled around $1 billion and resulted in FTX dropping “millions of dollars in avoidance claims and counterclaims” against BlockFi.
