BlockFi begins interim crypto distributions via Coinbase

Bankrupt crypto lender BlockFi has announced it will commence its first interim cryptocurrency distributions through Coinbase within this month.

Please keep in mind that client communications will exclusively occur via official email channels, on social media @BlockFi, via our claims agent, Kroll ([email protected] or [email protected]), or Kroll’s claims distribution partner Digital…

— BlockFi (@BlockFi) July 17, 2024

BlockFi fell victim to the contagion caused by crypto exchange FTX’s collapse in November 2022, filing for Chapter 11 bankruptcy protection on November 28, less than a month after halting withdrawals from its platform. The company has since been working through the courts to allow customer withdrawals of locked-up assets.

In September 2023, creditors approved BlockFi’s bankruptcy restructuring plan. Early in 2024, the company reached a settlement with the estates of FTX and Alameda Research for nearly $1 billion, bringing it closer to full recovery for customers. This latest announcement of distributions through Coinbase represents tangible progress in the process of returning funds.

“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 stated.

BlockFi noted that non-US clients are currently unable to receive funds due to applicable regulatory requirements.

Customers who did not withdraw their funds by earlier deadlines can contact the bankruptcy administrator, who has the ability to use Coinbase for future distribution rounds. This approach aims to provide a structured method for returning assets to affected users while navigating the complexities of the bankruptcy process.

Given the ongoing difficulties faced by crypto companies in the aftermath of major industry failures, the challenge of meeting regulatory requirements and fulfilling obligations to their users has become more crucial. The commencement of these distributions marks a critical milestone for BlockFi customers who have been waiting to regain access to their funds since the platform’s collapse.