Key Takeaways
- BlockFi will start its first interim crypto distributions through Coinbase in July 2024
- Non-US clients will not be able to receive funds due to regulatory requirements
Bankrupt crypto lender BlockFi announced that it will start its first interim crypto distributions via Coinbase in July 2024.Â
This move marks significant progress in returning funds to customers affected by BlockFi’s financial troubles following the collapse of crypto exchange FTX in November 2022.
BlockFi, one of the first victims of the FTX contagion, filed for Chapter 11 bankruptcy protection on November 28, 2022, shortly after halting withdrawals from its platform.
Since then, BlockFi has been working towards resolving its financial issues and facilitating customer withdrawals. In September 2023, creditors approved BlockFi’s bankruptcy restructuring plan, and early in 2024, the company reached a settlement with the estates of FTX and Alameda Research for nearly $1 billion.
This settlement has brought BlockFi closer to full recovery for its customers.
The latest announcement of distributions through Coinbase represents a tangible step forward in the process of returning funds to BlockFi clients. Eligible clients will be notified via the email associated with their BlockFi account, and the company has emphasized the importance of ensuring that email addresses are up-to-date to avoid delays in receiving notifications.
However, a significant restriction applies to non-US clients, who will not be able to receive funds at this time due to regulatory requirements. Earlier in May, BlockFi announced plans to shut down its web platform and partnered with Coinbase to allow clients to access and withdraw funds.
This partnership ensures that eligible BlockFi clients can still access crypto withdrawals via Coinbase, even after the platform shutdown, provided they have an approved Coinbase account.
The distributions will be processed in batches over the coming months, with notifications sent to the BlockFi account email on file. Clients who missed earlier withdrawal deadlines can reach out to the bankruptcy administrator to use Coinbase for future rounds of distributions.
This ongoing process highlights the challenges crypto companies face in meeting regulatory requirements and fulfilling obligations to their users, especially in the wake of major industry failures.
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. As the process unfolds, BlockFi’s efforts to restore customer confidence and meet regulatory standards will be closely watched by the crypto community.
