Nikolas Sargeant
BlockFi, the crypto lending platform that filed for bankruptcy in the wake of FTX's collapse, has announced plans to commence its initial temporary distribution of cryptocurrency assets. The distribution will be facilitated through Coinbase and is scheduled to begin in July.
According to a recent statement on social media, BlockFi will notify eligible account holders via email about the upcoming distribution. The process will be carried out in stages over several months. However, it's crucial to note that due to regulatory restrictions, non-US customers will not receive any funds.
Coinbase Partnership for Asset Distribution
In May, BlockFi revealed a collaboration with Coinbase to ensure continued crypto withdrawals for eligible BlockFi Interest Account (BIA) holders, Retail Loan clients, and Private Clients. With the initial withdrawal window for estate funds now closed, BlockFi is working alongside Coinbase to manage the next steps of the distribution process.
Clients can expect detailed instructions from BlockFi via email, including guidance on creating a Coinbase account. For those who missed the April 28 withdrawal deadline or failed to complete identity verification by May 10, there's still a chance to receive funds. These assets will be distributed in kind to individuals with open and approved Coinbase accounts.
If an approved Coinbase account is not established, the assets may be converted to cash and distributed as outlined in the plan. The Plan Administrator will use Coinbase for future distributions, including those based on funds recovered from FTX. This partnership enables crypto distributions; without it, only cash would be available in subsequent rounds. Clients unable to open a Coinbase account will receive cash distributions.
BlockFi's bankruptcy filing, which followed FTX's collapse, revealed over 100,000 creditors with estimated liabilities between $1 billion and $10 billion.
Scam Alert for BlockFi Clients
BlockFi has issued a warning to its clients about potential scam attempts. The company emphasized that it will not partner with any providers other than Coinbase for crypto distributions. This caution comes in response to recent scams targeting creditors of bankrupt digital asset firms, including FTX and BlockFi.
In March, FTX and BlockFi claimants received fraudulent emails that appeared legitimate, promising instant withdrawals of remaining balances. Security expert Plumferno highlighted that these scams likely originated from compromised emails obtained during the Mailer Lite data breach in January.
As the distribution process unfolds, BlockFi urges its clients to remain vigilant and rely only on official communications from the company regarding their assets and account status.
