BlockFi, a cryptocurrency lending platform which declared bankruptcy after the collapse of FTX in November 2022, is now in the final stages of winding down its operations. The company has announced plans to cease its web platform operations by May.
To assist clients in accessing and withdrawing their funds, BlockFi has entered a partnership with Coinbase. According to a recent blog post, this collaboration will allow eligible BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients to make withdrawals.
After announcing its closure in 2023 and outlining plans to return customers’ crypto holdings, BlockFi set a withdrawal request deadline for April 28, 2024. Following the expiration of this deadline, the company yesterday informed customers that they would receive guidance on setting up a Coinbase account to facilitate withdrawals.
For clients who missed both the withdrawal and May 10 deadlines, BlockFi is offering an additional chance for verification through its platform. However, clients who fail to establish an approved Coinbase account may face liquidation of their assets into cash, with distribution managed accordingly.
In a statement, BlockFi expressed its satisfaction with Coinbase as the chosen distribution partner and emphasized that it has no plans to collaborate with other platforms for cryptocurrency distributions. The firm also advised investors to remain cautious to prevent scams from third-party entities.
In March, BlockFi finalized an $875 million settlement in principle with the estates of FTX and Alameda Research, resolving BlockFi’s claims against FTX. Notably, this settlement included FTX waiving “millions of dollars of avoidance claims and other counterclaims” against BlockFi.
Zac Prince, the CEO of BlockFi and a key government witness in Sam Bankman-Fried’s criminal trial, testified that actions taken by the FTX founder directly led to BlockFi’s bankruptcy.
BlockFi’s Chapter 11 plan, approved by the bankruptcy court in September 2023, aims to repay its 10,000 creditors. The company faces debts totalling up to $10 billion owed to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to the bankrupt crypto hedge fund Three Arrows Capital.
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