As a long-term crypto investor who has been closely following the developments at BlockFi since their bankruptcy filing in late 2022, I am both relieved and excited about the upcoming crypto distributions via Coinbase starting in July 2024.
Starting in July 2024, eligible BlockFi customers will receive their crypto assets through Coinbase. The distributions will be made in batches, and registered email addresses will receive notifications upon processing.
July 2024 Distributions
In July 2024, insolvency-hit crypto lender BlockFi will begin making its initial cryptocurrency dispersals using Coinbase as the intermediary. According to a statement on X.com, this distribution process will unfold in installments over an extended period.
Clients who meet the criteria will be informed via their provided email addresses. Yet, it was indicated in the announcement that non-US clients currently cannot receive funds because of the regulatory restrictions affecting them.
BlockFi’s Background
In early November 2022, BlockFi became the first major victim following the downturn of crypto exchange FTX. The company sought refuge under Chapter 11 bankruptcy protection on November 28, 2022, shortly after halting customer withdrawals from its platform. Since then, BlockFi has been navigating through the legal proceedings to facilitate access to funds frozen on their platform for their clients.
In September 2023, the creditors endorsed BlockFi’s debt restructuring proposal. By early 2024, BlockFi had reached a settlement worth almost $1 billion with the estates of FTX and Alameda Research. This development brought BlockFi closer to restoring financial health for its clients.
Coinbase Collaboration
On its website, Coinbase announced a partnership between the Plan Administrator and the Joint Liquidators of BlockFi International for distributing funds to non-US clients. Nevertheless, it’s important to note that all necessary conditions must be met by all parties before any additional fund distributions can occur for non-US clients.
Coinbase noted,
Eligible customers who missed out on their funds before BlockFi’s system shutdown will receive distributions starting in July 2024. You will be notified via email from BlockFi when it’s your turn to receive your funds during the initial distribution. Once directed by BlockFi, Coinbase will continue attempting to distribute crypto assets on a weekly to monthly basis while this program is ongoing, given that you hold an eligible account with Coinbase.
Future Distributions
After May’s announcement from BlockFi, clients who were still eligible could withdraw their crypto holdings through Coinbase, even though BlockFi had closed down its web platform. However, it is important to note that Coinbase will not process any fiat claims for these clients. Instead, the distribution of eligible cash amounts will be handled by Kroll and its payment processing partner, Digital Disbursements.
The person responsible for managing distributions at BlockFi will go on using Coinbase for disseminating future payouts, including any recoveries stemming from the FTX and Alameda Research settlements worth approximately $875 million. Clients who missed earlier cut-offs for withdrawing their funds can still communicate with the bankruptcy administrator to arrange for Coinbase to handle future distribution rounds on their behalf.
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2024-07-19 16:26