BlockFi’s Interim Crypto Distributions Through Coinbase: A Step Towards Recovery

Bankrupt crypto lender BlockFi is making strides towards recovery as it prepares to distribute interim crypto funds through Coinbase in July 2024. This move comes after the fallout from the collapse of the FTX exchange, which had a significant impact on BlockFi and its customers.

BlockFi filed for Chapter 11 bankruptcy protection in November 2022, following the contagion caused by FTX’s collapse. Since then, the company has been working through the court system to unlock customer funds trapped on its platform.

In September 2023, BlockFi’s creditors approved a restructuring plan that paved the way for settlements with FTX and Alameda Research, totaling nearly $1 billion. These settlements have brought BlockFi closer to full recovery, leading to the upcoming distributions through Coinbase.

The distributions will be processed in batches over the coming months, with eligible clients receiving notifications via email. Non-US clients will not receive funds at this time due to regulatory requirements, but they can reach out to the bankruptcy administrator for future distributions.

The collapse of FTX highlighted the interconnected nature of the crypto ecosystem and the risks associated with centralized exchanges. BlockFi’s journey through bankruptcy and its recent settlements have been crucial in its recovery efforts, providing relief to affected clients.

As BlockFi continues to navigate regulatory challenges, the involvement of Coinbase in the distribution process enhances credibility and security. The company remains committed to restoring trust and financial stability for its users, showcasing the resilience of the crypto industry.

Overall, the commencement of interim distributions through Coinbase signifies a positive step forward for BlockFi and its clients, emphasizing the company’s dedication to recovering and reimbursing its customers in the aftermath of the FTX collapse.