BlockFi will completely shut down, but users could be able to make claims through Coinbase
BlockFi recently announced a new partnership with Coinbase to allow customers to make withdrawals from their accounts. The bankrupt crypto lender is in the process of shutting down its online platform, which will be completed in May.
BlockFi was forced to file for bankruptcy following FTX’s failure in November 2022 and announced it was closing operations in 2023. It also disclosed its plans for returning customer funds, setting a withdrawal request deadline for April 28, 2024.
BlockFi’s Chapter 11 bankruptcy filing was approved in September 2023, and it’s estimated that the company owes about $10 million to over 100,000 creditors. It then settled its $1 billion in claims against FTX and Alameda Research in March, reaching an $875 million in-principle settlement where “millions of dollars of avoidance claims and other counterclaims” were waived by FTX.
In a recent blog post, the company said that the new alliance with Coinbase will facilitate “eligible BlockFi Interest Accounts (BIA), Retail Loans, and Private Clients” to make withdrawals.
On May 9, BlockFi clients were informed that the withdrawal deadline had passed. Customers will be sent instructions on how to make withdrawals using Coinbase, whether or not they currently have an account.
BlockFi is pleased to announce Coinbase as our distribution partner to ensure continuity of crypto withdrawals available to our eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients.
— BlockFi (@BlockFi) May 9, 2024
Coinbase will be used for all future distributions, including funds possibly recovered from FTX. The company is giving customers who missed the original withdrawal date and the May 10 deadline another chance to verify their accounts using the BlockFi platform. Those who don’t set up a Coinbase account to withdraw can also liquidate funds into cash.
BlockFi urges investors to be cautious of potential third-party scams and announced it is not collaborating with other crypto platforms to distribute client funds.
