As a seasoned financial analyst with extensive experience in the crypto market, I have closely monitored the developments surrounding BlockFi’s bankruptcy and its ongoing efforts to repay its clients. Having followed this story since the beginning, I am encouraged by the latest announcement of interim distributions beginning this month for eligible clients through Coinbase.
BlockFi, a crypto lending company that filed for bankruptcy, made an announcement via a blog post on Wednesday. According to this update, the initial phase of dispersing client funds, in collaboration with Coinbase, is set to commence this month.
Based on BlockFi’s announcement, distributions during the interim period are set to start in July and will be handled in batches over the following months. Eligible customers will be informed about their repayments via emails connected to their BlockFi account.
Non-US Clients Restricted
Due to regulatory restrictions, BlockFi currently cannot distribute funds to clients residing outside the United States.
In May, Coinbase was selected by the lender as its distribution partner to facilitate the efficient dispersal of funds to eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients from the lender. The lender mentioned that clients who couldn’t create a Coinbase account then would receive cash instead.
Approximately 130,000 clients received refunds totaling over $500 million in cryptocurrency from BlockFi’s Wallet Product earlier this year.
Exiting Bankruptcy
After exiting bankruptcy in October 2023, BlockFi initiated its repayment plan. At this juncture, the firm announced that clients holding interest-yielding Earn accounts would be entitled to between 39.4% and 100% of their account balances.
In November 2022, BlockFi sought protection under Chapter 11 bankruptcy after the unexpected collapse of FTX, which previously intended to save the financially distressed lender. The bankruptcy petition disclosed over 100,000 potential creditors and financial obligations between $1 billion and $10 billion.
FTX and Alameda Research are being chased by the lender for outstanding debts, which could potentially boost the amount owed by clients by approximately $875 million.
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2024-07-18 22:26