BlockFi, the crypto lender that recently emerged from bankruptcy, has announced a significant step in its efforts to repay its clients. The company revealed that the first interim distribution of funds to clients through Coinbase will begin this month. This marks a major milestone in BlockFi’s journey towards rebuilding trust with its clients.
Interim Distribution Process
According to BlockFi, the interim distribution of funds will commence in July and will be processed in batches in the coming months. Eligible clients will receive repayment notifications through the email linked to their BlockFi accounts. However, it is important to note that clients outside the US will not be able to receive funds at this time due to regulatory requirements that apply to them.
BlockFi chose Coinbase as its distribution partner back in May to ensure an efficient allocation of funds to eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients. For clients who were unable to open a Coinbase account at the time, BlockFi assured that they would receive cash instead. This partnership with Coinbase demonstrates BlockFi’s commitment to providing a seamless repayment process for its clients.
Earlier this year, BlockFi refunded over $500 million worth of crypto from its Wallet Product to nearly 130,000 clients. This was part of the company’s efforts to address the fallout from its bankruptcy filing in November 2022. BlockFi filed for Chapter 11 bankruptcy protection following the collapse of FTX, which had initially agreed to rescue the lender before facing its own demise.
Client Repayment Values
When BlockFi emerged from bankruptcy in October 2023, it stated that clients with interest-bearing Earn accounts would receive between 39.4% and 100% of the value in their accounts. The company estimated more than 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion. BlockFi is still pursuing claims against FTX and Alameda Research to help increase clients’ repayment values, with these claims estimated to be worth around $875 million.
BlockFi’s announcement of the interim distribution of funds through Coinbase represents a positive step towards fulfilling its repayment obligations to clients. The company’s commitment to transparency and efficiency in the repayment process is commendable, and clients can look forward to receiving their funds in the coming months. As BlockFi continues to navigate its post-bankruptcy recovery, it is crucial that the company remains focused on rebuilding trust and restoring confidence among its clients.