BlockFi Begins Interim Distributions to Clients Through Coinbase

BlockFi, a bankrupt crypto lender, has announced a significant step towards repaying its clients. The company mentioned that the first interim distribution of funds through Coinbase will begin this month. The distribution will commence in July and will be processed in batches in the upcoming months. Eligible clients will receive repayment notifications through the email associated with their BlockFi accounts.

It is important to note that clients outside the US will not be able to receive funds at this time due to regulatory requirements that apply to them. BlockFi has partnered with Coinbase to efficiently allocate funds to eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients. For those clients who are unable to open a Coinbase account, they will receive cash instead.

Earlier this year, BlockFi refunded over $500 million worth of crypto from its Wallet Product to nearly 130,000 clients. These repayment efforts began after the company emerged from bankruptcy in October 2023. Clients with interest-bearing Earn accounts were promised to receive between 39.4% and 100% of the value in their accounts.

BlockFi filed for Chapter 11 bankruptcy protection in November 2022 following the collapse of FTX, which had previously agreed to rescue the lender before its own demise. In the bankruptcy filing, the company estimated over 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion. As part of their efforts to increase clients’ repayment values, BlockFi is still pursuing claims against FTX and Alameda Research, which are estimated to be worth around $875 million.

BlockFi’s decision to initiate interim distributions through Coinbase marks a significant step towards repaying its clients. Despite the regulatory restrictions for clients outside the US, the company is committed to ensuring that eligible clients receive their funds in a timely manner. With ongoing efforts to increase repayment values through claims against FTX and Alameda Research, BlockFi demonstrates a dedication to meeting its obligations to creditors and clients alike.