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BlockFi Announces Closure of Web Platform and Partnership with Coinbase
BlockFi, currently facing bankruptcy, has announced its plans to close its web platform by the end of the month. The company has decided to partner with Coinbase and utilize its services as a distribution associate. This move is part of the bankruptcy claims process and ensures uninterrupted access to withdrawals for BlockFi Interest Account (BIA), Retail Loans, and Private Clients.
For customers who have cryptocurrency holdings with BlockFi, they will have the option to access their funds in cash if they have an open or consented Coinbase account. This option is available to crypto-eligible clients who have not withdrawn crypto from BlockFi’s platform before April 28 and have verified their identity by May 10.
Cash disbursement will be made to crypto-eligible customers who do not have a Coinbase account or are unable to create one.
BlockFi has issued a warning to its users to beware of fraudulent activities and has clarified that it has not entered into partnerships with any other cryptocurrency companies for distribution purposes.
Plan Administrator for Distribution
BlockFi’s bankruptcy situation involves a plan administrator who will oversee the distribution process via Coinbase, as well as funds retrieved from FTX.
As of March, BlockFi was expecting to receive around $875 million from FTX. The priority will be given to the initial $250 million, with the remaining amount depending on FTX’s ability to compensate its customers. With Coinbase now in the mix, BlockFi has stated that only cash will be distributed moving forward, not cryptocurrency.
BlockFi’s Bankruptcy Journey
BlockFi initially halted withdrawals on November 10, 2022, citing a ‘lack of clarity’ regarding FTX’s specific bankruptcy situation. Shortly after, BlockFi filed for bankruptcy, with FTX being identified as its second-largest creditor.
In October 2023, BlockFi emerged from bankruptcy and began user payments this year.
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