BlockFi Kickstarts Customer Refunds Following Coinbase Team Up

BlockFi will begin distributing crypto assets to eligible customers via Coinbase starting in July 2024, with distributions processed in batches and notifications sent to registered email addresses.

July 2024 Distributions

Bankrupt crypto lender BlockFi will initiate its first interim crypto distributions via Coinbase in July 2024. The crypto firm announced through a post on X.com that these distributions will be processed in batches over the coming months. 

Eligible clients will receive notifications through their registered email addresses. However, the post specified that “non-US Clients are unable to receive funds at this time due to the regulatory requirements applicable to them.”

BlockFi’s Background

BlockFi was the first significant casualty following the collapse of crypto exchange FTX in early November 2022. The company filed for Chapter 11 bankruptcy protection on November 28, 2022, shortly after halting withdrawals from its platform. Since then, BlockFi has been working through the court process to allow customer withdrawals locked in the platform. 

In September 2023, creditors approved BlockFi’s bankruptcy restructuring plan. Early in 2024, BlockFi reached a settlement with the estates of FTX and Alameda Research for nearly $1 billion, bringing the company closer to full recovery for its customers.

Coinbase Collaboration

Coinbase revealed on its website that the Plan Administrator has collaborated with the Joint Liquidators of BlockFi International to ensure the distribution process for non-US clients. However, the firm emphasized that all stakeholders must confirm that all requirements are met to facilitate further fund distributions to non-US clients. 

Coinbase noted, 

“Distributions to eligible customers who didn’t receive their funds prior to the shutdown of BlockFi’s systems will start in July 2024. You will receive an email from BlockFi to notify you that you are going to receive your funds as part of the first distribution. Upon instruction from BlockFi, Coinbase will continue to attempt to distribute crypto assets on a weekly to monthly basis while this program is active, provided that the Creditor has an eligible account with Coinbase.”

Future Distributions

The distributions follow a May announcement that eligible BlockFi clients could still access crypto withdrawals via Coinbase after BlockFi shut down its web platform. However, Coinbase will not process BlockFi clients’ fiat claims. Instead, eligible cash distributions are managed by Kroll and its payment processing partner, Digital Disbursements. 

The plan administrator for BlockFi will continue to use Coinbase for future distributions, including any recoveries from the FTX and Alameda Research estates, for which BlockFi reached an $875 million in-principle settlement. Clients who missed earlier deadlines for fund withdrawals can still reach out to the bankruptcy administrator to use Coinbase for future rounds of distributions.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.