In a recent announcement, the bankrupt crypto lender BlockFi shared that they will be initiating the first interim distribution of funds to their clients via Coinbase. This move is a significant step in their ongoing efforts to repay their clients who were affected by the bankruptcy. The distribution of funds is set to begin this month, with the process continuing in batches over the coming months. Eligible clients will be notified of the repayment through the email associated with their BlockFi accounts. However, it is important to note that clients outside the US will not be able to receive funds at this time due to regulatory restrictions.
BlockFi decided to partner with Coinbase to streamline the allocation of funds to their eligible clients, including those with BlockFi Interest Account (BIA), Retail Loan, and Private accounts. Clients who were unable to open a Coinbase account when the partnership was established will receive cash instead of having the funds deposited directly into their Coinbase accounts. This strategic collaboration aims to expedite the repayment process and ensure that clients receive their dues in a timely manner.
Earlier this year, BlockFi made headlines when they refunded over $500 million worth of crypto from their Wallet Product to nearly 130,000 clients. This move signified the company’s commitment to addressing the fallout from their bankruptcy in October 2023. BlockFi had initially filed for Chapter 11 bankruptcy protection in November 2022 following the collapse of FTX, which had previously attempted to rescue the lender. The bankruptcy filing revealed that BlockFi had over 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion.
Despite emerging from bankruptcy, BlockFi continues to pursue claims against FTX and Alameda Research in order to enhance the repayment values for their clients. These claims are estimated to amount to around $875 million, showcasing the company’s determination to make amends for the financial turmoil that affected their clients. As BlockFi progresses with their repayment efforts, they are striving to rebuild trust and regain the confidence of their clients who were impacted by the bankruptcy. The collaboration with Coinbase and the forthcoming distributions of funds mark positive strides towards restoring stability and transparency in BlockFi’s operations.
Leave a Reply