Crypto lending platform BlockFi is in the final stages of winding down its operations, with plans to shut down its website in May. The company has struck a deal with Coinbase to facilitate fund withdrawals for its clients.
In a recent blog post, BlockFi revealed that its partnership with Coinbase will allow eligible clients to withdraw funds from their BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients.
BlockFi: From Bankruptcy to Closure
BlockFi filed for bankruptcy in November 2022 following the collapse of FTX. Last year, the company announced its closure and set a deadline for customers to request withdrawals by April 28, 2024.
In March, BlockFi reached an $875 million settlement with the estates of FTX and Alameda Research, resolving its claims against FTX. CEO Zac Prince testified in Sam Bankman-Fried’s criminal trial, attributing FTX founder’s actions directly to BlockFi’s bankruptcy.
In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 plan to repay its creditors, estimated to be up to $10 billion, including significant amounts owed to its largest creditors and bankrupt crypto hedge fund Three Arrows Capital.
With the withdrawal deadline expired, BlockFi informed clients that they would receive instructions on how to set up a Coinbase account for withdrawals. Those who missed the deadline and the subsequent grace period have an additional chance to verify their accounts.
Clients who fail to establish a Coinbase account may have their assets liquidated into cash and distributed accordingly.
Future Distribution Plans
The plan administrator intends to use Coinbase for future distribution rounds, potentially involving recovered funds from FTX. BlockFi emphasized that it does not plan to partner with other platforms for cryptocurrency distributions. Investors are warned to be wary of potential scams from third-party entities.
