Bankrupt crypto lending platform BlockFi recently announced that repayments for customers who didn’t complete the withdrawal process through the platform will begin this month. Following the web platform’s shutdown in May, the interim crypto distributions will also be made through its partnership with crypto exchange Coinbase.
BlockFi Announces First Interim Crypto Distributions
In May, BlockFi announced the shutdown of its web platform at the end of the month. The crypto lending company also revealed its distribution partnership with crypto exchange Coinbase for client fund withdrawals. Through the partnership, the eligible users who missed the withdrawal deadline of April 28 would have access to their crypto withdrawals via Coinbase.
On July 17, the lending platform revealed on X that the first interim crypto distributions will begin this month through Coinbase. Per the announcement, customers who met certain criteria would receive repayments through the distribution partner.
The criteria included crypto-eligible users who didn’t receive the first interim distribution before the BlockFi system’s shutdown and customers eligible for additional crypto distribution. Eligible users outside of the US will not receive funds simultaneously. BlockFi cited “regulatory requirements” applicable to non-US clients as the reason for the delay.
However, it assured that “The Plan Administrator has been working tirelessly with the Joint Liquidators of BlockFi International to implement a distribution process for non-US Clients that complies with Bermuda regulation.”
The crypto lending platform detailed that the distributions will be processed in batches in the coming months, and customers will receive a notification to the BlockFi account email on file.
Additionally, it explained that users who did not complete the identity verification process by the May 10 deadline can withdraw their assets via Coinbase if they create or already have an approved account in the crypto exchange. Users who opt out of an approved account by Coinbase will receive their distribution in cash.
Eligible Users Receive Coinbase Notification
BlockFi users reported receiving Coinbase notifications on Thursday. In the subreddit dedicated to the crypto lending platforms, customers shared emails informing them the identifying information on Coinbase successfully matched the crypto lending platform’s data.
Several clients expressed excitement and claimed the repayment development was “very good news.” Nonetheless, some customers shared some skeptical comments regarding the distribution state.
One Reddit user claimed, “It’s still all talk with BF/Kroll” until they see the money in their Coinbase account. Another Redditor pointed out the time they have waited, stating that they “expect to see a deposit on or about December 13, 2028.”
As the first round of emails are received, the crypto lending platform urged users to be aware of phishing scam attempts. They warned that client communication exclusively occurs via official email channels, on social media, via our claim’s agent, Kroll, or Kroll’s claims distribution partner, or from Coinbase.
On November 22, BlockFi filed for Chapter 11 bankruptcy protection in the US District of New Jersey after being impacted by the collapse of Three Arrows Capital (3AC) and FTX.
At the time, the platform stated it had $257 million in cash and over 100,000 creditors with hundreds of millions in unsecured claims. Among the list, the US Securities and Exchange Commission was included as a creditor with $30 million in unsecured claims.
Earlier this year, BlockFi agreed with FTX and its trading arm, Alameda Research, to settle claims worth nearly $1 billion. The settlement ensured that FTX recognized the total amount owned.
