Understanding BlockFi’s Distribution Update on Coinbase
BlockFi recently announced that it will begin the temporary distribution of crypto assets through Coinbase, starting in July. Eligible account holders will receive email notifications regarding the distribution, which will occur in batches over the next few months. It’s crucial to note that non-US customers won’t receive any funds due to regulatory restrictions.
Partnership Between BlockFi and Coinbase
In May, BlockFi revealed a collaboration with Coinbase to ensure seamless crypto withdrawals for eligible BlockFi Interest Account, Retail Loan, and Private Clients. The platform closed the initial withdrawal window for estate funds and is now assisting clients in the next steps through Coinbase.
- BlockFi will share detailed instructions on creating a Coinbase account via email.
- Clients who missed the withdrawal deadline or verification process can still receive funds.
- Assets will be available in kind if the client has an open and approved Coinbase account.
- Assets may be converted to cash if no Coinbase account is created.
Coinbase as the Preferred Distribution Platform
To facilitate upcoming distributions, including those from FTX recoveries, the Plan Administrator has chosen Coinbase as the primary distribution platform. Without this partnership, only cash distributions would be available in future rounds. Clients unable to open a Coinbase account will receive their distributions in cash.
BlockFi’s Bankruptcy and Cautions
BlockFi was the first company to file for bankruptcy post the FTX collapse, owing between $1 billion and $10 billion to over 100,000 creditors. The firm issued a caution to clients to beware of scam attempts by third parties falsely offering crypto distributions. They emphasized that BlockFi is not partnering with any other providers for these distributions.
Scam Warning for Crypto Holders
BlockFi warned clients against scam attempts from fraudulent actors pretending to provide crypto distributions. With scammers targeting creditors of FTX and BlockFi, users were receiving fake emails promising instant withdrawals of their remaining balances. These emails, impersonating BlockFi’s restructuring team, were flagged by security experts as likely stemming from a data breach at Mailer Lite in January.
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