BlockFi has partnered with Coinbase for fund distribution, closing the web platform.
Bankrupt crypto-lender BlockFi is winding down its winding-up process by announcing its intention to shut down its web platform in May. BlockFi has partnered with Coinbase to allow customers to access and withdraw their funds.
In a blog post, the company's partnership with Coinbase will allow “eligible BlockFi Interest Accounts (BIA), retail loans and private customers” to withdraw their funds.
In the year In November 2022, BlockFi declared bankruptcy following the collapse of FTX, and in 2023, BlockFi announced its closure and outlined plans to return its customers' crypto holdings, with an exit request deadline set for April 28, 2024.
The lender will receive instructions on setting up a Coinbase account to facilitate withdrawals using an existing or new Coinbase account, as the deadline for customers to withdraw digital assets from their current asset distribution passes on Thursday, May 9.
The company is offering an extra chance to confirm through the Blockchain platform for those who missed the release deadline and the May 10 deadline. Customers who do not establish an authorized Coinbase account may have their assets withdrawn in cash and distributed accordingly.
The plan administrator will continue to use Coinbase for subsequent distribution rounds, which may include funds returned from FTX.
BlockFi has stated that it does not intend to partner with other platforms for cryptocurrency exchanges. Therefore, investors are advised to be careful to avoid possible frauds from third party entities.
Related: FTX victims describe ‘irreparable damage' ahead of Sam Bankman-Fried verdict
BlockFi has experienced fraudulent activity in the past, with individuals receiving deceptive emails that look like legitimate communications, falsely claiming that their balances have been withdrawn instantly.
BlockFi reached an $875 million agreement in principle with FTX and Alameda Research States in March. The settlement resolves BlockFi's claims against FTX for a total of $1 billion, and sees FTX relinquishing “millions of dollars in liquidation claims and other claims” against BlockFi.
BlockFi CEO Zach Prince, who testified as a government witness at the Sam Bankman-Fried criminal trial, said the FTX founder's actions directly led to BlockFi's bankruptcy.
In September 2023, the bankruptcy court approved BlockFi's Chapter 11 filing to pay off 10,000 creditors. Estimates show that BlockFi owes up to $10 billion to more than 100,000 creditors, including $1 billion to the three largest creditors and $220 million to bankrupt crypto hedge fund Three Arrows Capital.
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