Crypto lender BlockFi has taken a significant step towards repaying its clients by announcing the start of the first interim distribution of funds through Coinbase. The distribution process will begin this month and will continue in batches over the next few months. Eligible clients will receive notifications through the email linked to their BlockFi accounts.
Unfortunately, clients outside the US will not be able to receive funds at this time due to regulatory requirements. BlockFi has partnered with Coinbase to efficiently allocate funds to eligible clients, including those with BlockFi Interest Accounts, Retail Loans, and Private accounts. Clients who are unable to open a Coinbase account will receive their funds in cash.
Earlier this year, BlockFi refunded over $500 million worth of crypto to nearly 130,000 clients from its Wallet Product. The repayment efforts come after BlockFi emerged from bankruptcy in October 2023. Clients with interest-bearing Earn accounts are expected 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 initially agreed to rescue the lender before facing its own demise. The bankruptcy filing estimated over 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion.
To increase clients’ repayment values, BlockFi is pursuing claims against FTX and Alameda Research, which are estimated to be valued at around $875 million. The company is determined to fulfill its obligations to its clients and ensure that they receive the funds they are owed.
Overall, BlockFi’s repayment efforts are a positive development for its clients, as the company works to address the aftermath of its bankruptcy and provide financial relief to those affected. The partnership with Coinbase and ongoing pursuit of claims against other entities demonstrate BlockFi’s commitment to making things right for its clients.