BlockFi Announces Closure, Partners with Coinbase for Client Fund Withdrawals
Summary:
BlockFi, the troubled crypto lending platform, is set to end operations and discontinue its online platform by May 2024. To ensure clients can withdraw their funds, BlockFi is partnering with Coinbase. Following the bankruptcy declaration post FTX's collapse, the company had a withdrawal request deadline on April 28, 2024. Any clients who missed this deadline must set up a verified Coinbase account or their assets will be liquidated into cash. BlockFi reached an $875 million tentative settlement with the estates of FTX and Alameda Research. BlockFi owes an estimated total of $10 billion to over 100,000 creditors.
Crypto lending platform BlockFi is preparing to cease operations, announcing plans to discontinue its online platform by May 2024. In order to facilitate withdrawals for its clients, BlockFi will collaborate with leading crypto exchange Coinbase for the distribution of funds. The New Jersey-based firm announced via a blog post that their partnership with Coinbase would enable users of BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients to withdraw their respective crypto assets.
Back in November 2022, BlockFi filed for bankruptcy in the wake of FTX's demise, and in the ensuing year, finalized its closure plan including the return of customer crypto assets. The deadline for withdrawal requests was set for April 28, 2024. As the cutoff for withdrawals has now passed, BlockFi's clients were instructed on how to use Coinbase, whether they were existing users or need to create a new account, to facilitate the retrieval of their assets.
On a related note, for those who failed to meet the withdrawal deadline, an extra opportunity is provided by setting up the May 10 deadline for verification through the BlockFi platform. Any client who fails to set up a validated Coinbase account risks having their assets liquidated into cash and distributed accordingly.
In addition, BlockFi's plan administrator plans to rely on Coinbase for future rounds of distribution, possibly involving the return of funds sourced from FTX. Should this option not be in place, ensuing distributions would have to be made exclusively in cash. BlockFi has made it clear that they won't joint efforts with any other service for crypto distribution. As such, clients are advised to exercise caution to avoid falling prey to potential scam attempts from third-party actors.
The company has previously been plagued by dishonest activity, with persons receiving misleading emails appearing to be legitimate BlockFi communications, erroneously promising immediate asset withdrawals.
In more recent developments, BlockFi reached a tentative settlement of $875 million with the estates of FTX and Alameda Research, a deal which not only resolved BlockFi's claims against FTX of around $1 billion but also saw the latter renounce millions of dollars in avoidance claims against BlockFi.
BlockFi's CEO, Zac Prince, formerly a government witness in the criminal trial of FTX's founder, blames the actions of the latter for BlockFi's financial distress. Following the approval of BlockFi's Chapter 11 repayment plan by the bankruptcy court in September 2023, estimates suggest that the company owes upwards of $10 billion to over 100,000 creditors. Included in this is a $1 billion debt to its top three creditors and $220 million to the now insolvent Three Arrows Capital crypto hedge fund.
Published At
5/10/2024 10:32:04 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.