BlockFi Begins Crypto Distributions through Coinbase to Creditors
BlockFi, a bankrupt crypto lender, will start interim crypto distributions to creditors via Coinbase this year. The company announced this major move as part of its recovery process after filing for Chapter 11 bankruptcy protection in November 2022 following FTX’s collapse.
The Rise and Fall of BlockFi
- BlockFi, founded in 2017 by Zac Prince and Flori Marquez, gained popularity for high-yield interest accounts and crypto-backed loans.
- The company faced regulatory challenges in July 2021, leading to a $100 million settlement with the SEC in February 2022 over its lending product.
- FTX’s collapse in November 2022 dealt a severe blow to BlockFi, resulting in liquidity issues and bankruptcy filing.
Post-Bankruptcy Recovery
- BlockFi’s restructuring plan, with significant creditor approval, paved the way for its emergence from bankruptcy in October 2023.
- The company is now gearing up to return customer funds, with Coinbase assisting in distributing funds to creditors.
- Distributions will prioritize wallet customers initially, with BlockFi Interest Account (BIA) and loan customers to follow.
- Recovering percentages for BIA holders range from 39.4% to 100%, depending on FTX’s bankruptcy outcome and BlockFi’s equity in Robinhood.
What to Expect Next?
- As of now, BlockFi customers are eagerly awaiting the interim distributions, with withdrawal options available for wallet customers.
- BIA and loan customers are still awaiting repayments, with the exact timing and amounts contingent on the FTX bankruptcy proceedings.
Hot Take: Stay Tuned for BlockFi’s Recovery Progress
Keep an eye on BlockFi’s ongoing recovery process this year as the company navigates the aftermath of bankruptcy and strives to return funds to its customers. Stay informed about the latest updates as BlockFi works towards addressing regulatory challenges and rebuilding trust in the crypto community.
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