BlockFi, a crypto lender that recently emerged from bankruptcy, has taken a significant step towards repaying its clients. The company announced that it would begin the first interim distribution of funds to its clients through Coinbase. This process will start in July and continue in batches over the following months.
According to BlockFi, eligible clients will receive notifications about the repayment through the email linked to their BlockFi accounts. However, clients outside the US are currently unable to receive funds due to regulatory requirements that apply to them. To streamline the distribution process, BlockFi has partnered with Coinbase to efficiently allocate funds to its BlockFi Interest Account (BIA), Retail Loan, and Private clients.
Earlier this year, BlockFi refunded over $500 million worth of crypto from its Wallet Product to nearly 130,000 clients. The company’s repayment efforts began after emerging from bankruptcy in October 2023. When the firm filed for Chapter 11 bankruptcy protection in November 2022, it estimated having more than 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion.
BlockFi’s bankruptcy filing came after the collapse of FTX, which had initially agreed to rescue the lender before its own demise. As part of the repayment process, the company is still pursuing claims against FTX and Alameda Research to increase the values of clients’ repayments. These claims are estimated to be worth around $875 million.
BlockFi’s efforts to repay its clients demonstrate a commitment to rectifying the fallout from its bankruptcy. Through strategic partnerships and ongoing claims against relevant parties, the company is working towards ensuring that its clients receive their entitled funds. The interim distribution process through Coinbase marks a significant milestone in BlockFi’s recovery journey, providing hope for a brighter future for all parties involved.
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