On May 9, BlockFi, a popular cryptocurrency lending platform, announced the closure of its web platform. We are carrying out asset management and distribution in partnership with Coinbase, a US-based cryptocurrency exchange. However, BlockFi has not yet announced a specific end date.
This move marks a significant turning point for BlockFi. We are navigating a complex financial situation after filing for Chapter 11 bankruptcy in late 2023.
What’s next for BlockFi customers?
According to an official statement, BlockFi will email customers detailed instructions on creating a Coinbase account. This will make the transition easier. Customers who have not withdrawn their digital assets by 23:59 UTC on April 28, 2024 and have not completed identity verification by 23:59 UTC on May 10, 2024 will be able to retrieve their assets in-kind from Coinbase.
BlockFi added, “For BlockFi customers who are unable to open a Coinbase account, all distributions will be made in cash, subject to plan provisions requiring cash distributions if cryptocurrency distributions are not possible.”
BlockFi also encourages all customers to download their transaction history and other related documents.
Additionally, plan administrators can now select Coinbase for future distributions. This includes all funds recovered from FTX.
Read more: FTX collapse explained: How did Sam Bankman-Fried’s empire fall?
BlockFi’s announcement of the closure of its web platform follows the disclosure of FTX’s updated repayment plan. The plan includes BlockFi as a “key stakeholder.”
FTX’s repayment to BlockFi will be made pursuant to a previously approved agreement. BlockFi reached a principal settlement with FTX and Alameda Research in March of this year.
Under the terms of the settlement, FTX committed to make an upfront payment of $250 million 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 agreement stems from the close relationship between BlockFi and FTX. Following the FTX failure in November 2022, BlockFi suspended withdrawals of customer funds.
Read more: Best BlockFi Credit Card Alternatives
BlockFi said it was severely affected by the collapse of FTX. Nonetheless, it is important to remember that BlockFi is FTX’s largest creditor.
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