Now-defunct and bankrupt crypto lender, BlockFi, has confirmed the sale of its FTX claims as its bankruptcy process nears completion.
According to a statement from its plan administrator and M3 Partners Managing Partner Mohsin Y. Meghji, the sale was reported to the United States Bankruptcy Court for the District of New Jersey on Monday, July 22, 2024.
The sale process, which ran from June 24 to July 10, achieved the “highest and best bid” at a “substantial premium to their face value,” according to Meghji. The claims were monetized through an undisclosed third party.
This development follows BlockFi’s $874.5 million settlement with the FTX and Alameda Research estates in March, which paved the way for planning subsequent distributions to BlockFi creditors. The recent sale is expected to enable a “near-term” final distribution of 100% of eligible customer and general unsecured creditor claims in fiat terms.
Meghji praised the transaction as “the best possible outcome for customers of BlockFi,” noting that the recoveries and timeline were “unimaginable” when the cases were filed in November 2022. He expressed intent to commence the final customer distribution as quickly as reasonably practicable.
BlockFi shut down its web platform in May and recently announced plans to begin in-kind crypto distributions via Coinbase in July 2024. The firm didn’t give a specific start date but noted that the distributions to eligible customers will be processed in batches over the coming months. Its fiat claims are being handled by Kroll and its payment processing partner, Digital Disbursements.
However, the announcement highlighted a notable restriction: non-US clients are currently unable to receive funds due to regulatory constraints.
“Distributions to BlockFi International creditors may require additional identity verification and Know Your Customer diligence in compliance with international standards,”
The company also stressed the importance of clients maintaining up-to-date email addresses associated with their BlockFi accounts to ensure timely receipt of distribution information.
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