Key takeaways:
- BlockFi is wrapping up its operations and announcing the closing of its online platform in May. Coinbase and BlockFi have teamed up to withdraw money.
- The plan administrator will still use Coinbase for future payout rounds, which may involve recovered cash from FTX.
BlockFi, a bankrupt cryptocurrency lender, is wrapping up its operations and announcing the closing of its online platform in May. Coinbase and BlockFi have teamed up to enable customers to access and withdraw money.
The company announced in a blog post that “eligible BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients” will be able to withdraw their money thanks to the partnership with Coinbase.
Following the fall of FTX, BlockFi filed for bankruptcy in November 2022. In 2023, BlockFi announced its closure and provided details on how it would restore clients’ cryptocurrency holdings. The deadline for withdrawal requests was set for April 28, 2024.
On Thursday, May 9, the lender notified its clients that they would receive instructions on how to set up a Coinbase account to enable withdrawals, regardless of whether they were using an existing or new Coinbase account. This was because the deadline for withdrawing digital assets from the current estate distribution had passed.
For individuals who missed the withdrawal and May 10 deadlines, the business offers one more chance for verification through the BlockFi platform. If clients don’t open an authorized Coinbase account, their assets might be converted to cash and allocated appropriately.
The plan administrator will still use Coinbase for future payout rounds, which may involve recovered cash from FTX.
According to BlockFi, it has no plans to collaborate with other sites to distribute cryptocurrencies. Therefore, investors are urged to exercise caution to avoid any potential scams from unaffiliated parties.
In the past, fraudulent activity has been reported on BlockFi. Users have been tricked into believing they can withdraw their remaining funds immediately by sending phony emails that seem to be from reputable sources.
In March, BlockFi came to a $875 million in-principle deal with the FTX and Alameda Research estates. BlockFi’s claims against FTX, which amounted to around $1 billion, were settled, and FTX also agreed to forego further counterclaims against BlockFi and millions of dollars’ worth of avoidance claims.
The CEO of BlockFi, Zac Prince, stated that the FTX founder’s conduct caused BlockFi to go bankrupt. Prince provided testimony as a government witness at Sam Bankman-trial Fried’s criminal prosecution.
The bankruptcy court accepted BlockFi’s Chapter 11 plan in September 2023, allowing it to repay its 10,000 creditors. According to estimates, BlockFi owes over 100,000 creditors up to $10 billion, including $220 million to Three Arrows Capital, an insolvent cryptocurrency hedge firm, and $1 billion to its three biggest debtors.
