BlockFi’s Final Bow: Coinbase Takes Over Asset Distribution

On May 9, BlockFi, which was a popular crypto lending platform, announced the closure of its web platform. It is partnering with Coinbase, a US-based crypto exchange, to manage and distribute assets. However, BlockFi has not yet announced a specific shutdown date.

This move is a significant pivot for BlockFi. It has been navigating a complex financial situation since its late 2023 Chapter 11 bankruptcy filing.

What’s Next for BlockFi Customers?

According to the official statement, BlockFi will email clients detailed instructions on creating a Coinbase account. This will facilitate the transition. Clients who didn’t withdraw their digital assets by April 28, 2024, at 23:59 UTC and didn’t complete identity verification by May 10, 2024, at 23.59 UTC, will find their assets available in kind at Coinbase.

“For BlockFi clients who are unable to open a Coinbase account, all distributions will be made in cash, pursuant to the provisions of the Plan that require cash distributions where crypto distributions are not feasible,” BlockFi added.

BlockFi also encourages all clients to download their transaction history and other relevant documents.

Furthermore, the Plan Administrator can now choose Coinbase for future distributions. This includes any funds recovered from FTX.

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

BlockFi’s web platform shutdown announcement follows FTX revealing its updated repayment plan. The plan includes BlockFi as a “key stakeholder.”

FTX’s repayment to BlockFi will be based on the previously approved settlement. BlockFi reached a principal settlement with FTX and Alameda Research in March this year.

Under the settlement terms, FTX has pledged to prioritize a $250 million payment to BlockFi. This initial amount is part of a larger $874 million settlement. The settlement aims to compensate BlockFi for assets held on the FTX exchange and loans to Alameda Research.

This settlement stems from a close relationship between BlockFi and FTX. After the FTX fiasco in November 2022, BlockFi suspended withdrawals for its customer’s funds.

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BlockFi stated it was severely affected by FTX’s collapse. Nonetheless, it’s crucial to note that BlockFi was FTX’s biggest creditor.