BlockFi has partnered with Coinbase to distribute funds during the lockdown.
Struggling cryptocurrency lender BlockFi has announced its intention to cease operations and close its web platform by May 2024. To help customers withdraw funds, BlockFi will partner with Coinbase, a leading cryptocurrency exchange, for fund distribution.
In a blog post, the New Jersey-based company said its collaboration with Coinbase will allow eligible BlockFi Interest Accounts (BIAs), retail lenders, and individual customers to withdraw their cryptocurrency holdings.
In November 2022, BlockFi declared bankruptcy following the FTX collapse, and in 2023, BlockFi announced its closure and outlined plans to return customers’ cryptocurrency holdings, with a deadline for withdrawal requests set for April 28, 2024.
The lender told customers on Thursday that since the deadline to withdraw digital assets from current asset distributions has passed, customers will receive instructions on how to set up a Coinbase account to facilitate withdrawals using an existing or newly approved Coinbase account. Notified.
The company is offering those who missed the withdrawal deadline and May 10 verification deadline an additional opportunity through the BlockFi platform. Customers who do not have an approved Coinbase account set up can liquidate their assets for cash and distribute them accordingly.
Plan administrators will continue to use Coinbase for future distribution rounds, which could potentially include funds withdrawn from FTX. Without these features, cash would be the only option for subsequent distributions.
BlockFi said it has no plans to partner with other providers to distribute cryptocurrency. Therefore, investors are advised to exercise caution to avoid the possibility of being scammed by third parties.
Related: FTX victims claim ‘irreparable damage’ ahead of Sam Bankman-Fried’s sentencing
BlockFi has faced fraud in the past. Individuals received fraudulent emails mimicking legitimate communications, falsely claiming they could immediately withdraw their remaining balance.
Importantly, BlockFi has reached an agreement in principle with FTX and Alameda Research assets for $875 million. The settlement resolves BlockFi’s claims against FTX (totaling $1 billion) and FTX waives “multi-million dollar avoidance claims and other counterclaims” against BlockFi.
BlockFi CEO Zac Prince, who testified as a government witness in Bankman-Fried’s criminal trial, claims the FTX founder’s actions directly led to BlockFi’s bankruptcy.
In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 plan to repay 10,000 creditors. Estimates show that BlockFi owes up to $10 billion to more than 100,000 creditors, including $1 billion to its top three creditors and $220 million to bankrupt cryptocurrency hedge fund Three Arrows Capital.
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