BlockFi To Begin Interim Crypto Distributions Via Coinbase In July

Bankrupt crypto lender BlockFi has announced plans to initiate interim crypto distributions through Coinbase starting this month.

In a recent post on X, BlockFi provided details of its distribution plans, stating that the process will commence in July and will be carried out in batches over the upcoming months. Eligible clients will receive notifications through the email associated with their BlockFi accounts.

The move comes after BlockFi announced a partnership with Coinbase in May to facilitate crypto withdrawals for eligible BlockFi Interest Account (BIA), Retail Loan, and Private Clients. The company also shut down its web platform at the time.

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Non-US Clients Won’t Receive Funds

It is worth noting that non-US clients of BlockFi will not be able to receive funds at this time. “Please note that non-US Clients are unable to receive funds at this time due to the regulatory requirements applicable to them,” the firm wrote.

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. Please note that non-US Clients are unable to receive funds at this time due to the regulatory requirements applicable to…

— BlockFi (@BlockFi) July 17, 2024

BlockFi’s entry into bankruptcy proceedings followed the collapse of FTX in November 2022. In 2023, BlockFi announced its shutdown and outlined a plan to refund customers’ digital currency holdings. The deadline for clients to request withdrawals was set for 28 April, 2024.

In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 repayment plan, which aims to settle debts with approximately 10,000 creditors.

BlockFi’s total liabilities are estimated to range from $10 billion to over 100,000 creditors, with its three largest creditors being owed a substantial $1 billion. The now-bankrupt crypto hedge fund Three Arrows Capital is among the significant creditors, with a claim of $220 million.

Recently, BlockFi reached a tentative agreement worth $875 million with the estates of FTX and Alameda Research. This settlement resolved BlockFi’s claims against FTX, totaling around $1 billion, and led to FTX dropping “millions of dollars in avoidance claims and counterclaims” against BlockFi.

During the criminal trial of Sam Bankman-Fried, the CEO of FTX, BlockFi’s CEO Zac Prince testified as a government witness. Prince pointed to Bankman-Fried’s actions as the primary reason behind BlockFi’s bankruptcy.

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BlockFi Creditors Warned Against Potential Scams

As BlockFi moves forward with its interim crypto distributions, the company has urged clients to remain vigilant against scam attempts. The crypto lender emphasized that it would not be partnering with any other providers for crypto distributions.

The warning comes as scammers have been targeting creditors of bankrupt digital asset firms like FTX and BlockFi. In March, claimants of FTX and BlockFi received fraudulent emails that appeared legitimate, promising instant withdrawals of their remaining balances.

Security experts have traced these scam attempts to a network of compromised emails from Mailer Lite’s data breach that occurred in January.

The emails appear to come from the BlockFi restructuring team with an update on their court case and offer affected users the chance to withdraw their remaining balances… just click here and prove you own the wallet in question! pic.twitter.com/zXaFmQLtMD

— Plum (@Plumferno) March 23, 2024

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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