- BlockFi has announced initial cryptocurrency distributions via Coinbase starting this month
- The bankrupt lender has stated that distributions will occur in batches throughout the year
- BlockFi and Coinbase have agreed on a one-year distribution period
Defunct crypto lender BlockFi has announced it will begin initial cryptocurrency distributions through Coinbase this month, although non-US customers will have to wait a little longer. BlockFi stated on its X account on Wednesday that the process will unfold in batches throughout the rest of the year, with eligible clients being notified via email. BlockFi and Coinbase have agreed on a one-year distribution period which won’t start until the last payment has been sent.
BlockFi Followed FTX into Bankruptcy
BlockFi filed for Chapter 11 bankruptcy in November 2022 following the collapse of FTX, revealing assets of $256 million compared to over $1 billion in liabilities. The company collapsed owing money to over 100,000 creditors and opted for liquidation in May 2023. Since then, its liquidators have been working on a way to get what funds remain back in the hands of creditors.
Two months ago, BlockFI revealed a payout deal with Coinbase for its BlockFi Interest Account, Retail Loan, and Private Clients. Eligible creditors who didn’t want to go through Coinbase were offered the opportunity to “have their in-kind distribution liquidated to cash and distributed to them in cash.” These are being managed by Kroll and its payment processing partner, Digital Disbursements.
Non-US Creditors Face Witing Game
BlockFi revealed the update through its X account:
As described in our previously announced Coinbase distribution partnership blog post (https://t.co/M0T56YiKAe), BlockFi will commence first interim crypto distributions through Coinbase in July 2024.
— BlockFi (@BlockFi) July 17, 2024
The company noted that the payouts are for US creditors only and didn’t give a particularly positive update for non-US customers:
The Plan Administrator has been working tirelessly with the Joint Liquidators of BlockFi International to implement a distribution process for non-U.S. clients that complies with Bermuda regulation. Until all relevant stakeholders confirm that those requirements have been met, no further funds are approved for distribution to non-U.S. clients,” Coinbase explained on its website.
BlockFi and Coinbase have agreed on a one-year distribution period, which commences after the initial asset distribution to creditors.
