BlockFi Announces Partnership with Coinbase for Fund Distribution, Ends Web Platform Operations

BlockFi, the crypto lending firm that declared bankruptcy following the collapse of FTX, is finalizing its operations and has announced the closure of its web platform.

In a move to manage the distribution of funds effectively, BlockFi has partnered with Coinbase, ensuring that clients have a means to access and withdraw their funds.

BlockFi is pleased to announce Coinbase as our distribution partner to ensure continuity of crypto withdrawals available to our eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients.

— BlockFi (@BlockFi) May 9, 2024

According to BlockFi, the partnership with Coinbase will cater to “eligible BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients,” allowing them to withdraw their funds.

This collaboration comes after BlockFi’s bankruptcy announcement in November 2022 and its subsequent decision to shut down operations in 2023.

BlockFi has set a withdrawal request deadline for April 28, 2024, indicating a structured plan to return customers’ cryptocurrency holdings.

BlockFi to shut web platform this month, will let users access funds via Coinbase https://t.co/CmfEm9NhHh

— The Block (@TheBlock__) May 10, 2024

As of May 9, following the passing of the withdrawal deadline from the current estate distribution, BlockFi informed its clients that they would receive instructions on setting up a Coinbase account.

This setup can be done with either an existing or a new account at Coinbase.

For those who missed the withdrawal deadline, BlockFi is providing an additional verification opportunity via its platform until May 10.

Those failing to establish an approved Coinbase account may see their assets liquidated into cash and distributed accordingly.

BlockFi has committed to continuing its use of Coinbase for future distribution rounds, which may include funds recovered from FTX.

The company has explicitly stated it will not partner with any other platforms for cryptocurrency distributions, advising investors to remain vigilant against potential scams by third-party entities.

UPDATE: BANKRUPT CRYPTO LENDER BLOCKFI ANNOUNCES CLOSURE; COINBASE TO ALLOW BLOCKFI CLIENTS TO ACCESS AND WITHDRAW FUNDS

— BSCN Headlines (@BSCNheadlines) May 10, 2024

The company has been vigilant against fraud, notably identifying and alerting clients to deceptive emails that mimicked legitimate communications, falsely claiming immediate withdrawal opportunities.

In a significant financial recovery, BlockFi reached an $875 million in-principle settlement with the estates of FTX and Alameda Research in March.

This settlement addressed BlockFi’s claims against FTX, which totaled approximately $1 billion, and included the waiver of “millions of dollars of avoidance claims and other counterclaims” by FTX against BlockFi.

BlockFi leaked financials show $1.2 billion tied to FTX and Alameda. pic.twitter.com/HmgqViprbX

— Yahoo Finance (@YahooFinance) January 27, 2023

BlockFi’s CEO, Zac Prince, who testified as a government witness in Sam Bankman-Fried’s criminal trial, pointed out that the actions of the FTX founder were directly responsible for BlockFi’s financial troubles.

In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 plan, which aims to repay its 10,000 creditors.

Estimates suggest that BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its top three creditors and $220 million to the bankrupt crypto hedge fund Three Arrows Capital.

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