The Progress of BlockFi in Repaying its Clients

BlockFi, a crypto lender that recently emerged from bankruptcy, has unveiled a significant development in its efforts to repay its clients. The company announced that it will start the first interim distribution of funds to clients through Coinbase this month. This distribution will be carried out in batches over the next few months, beginning in July. Eligible clients will be notified of the repayment process via email connected to their BlockFi accounts. It is important to note that clients located outside the US will not be able to receive funds at this time due to regulatory constraints that apply to them.

In May, BlockFi selected Coinbase as its distribution partner to streamline the allocation of funds to eligible clients holding BlockFi Interest Accounts (BIA), Retail Loans, and Private accounts. Clients who were unable to create a Coinbase account when the partnership was initially announced will receive cash as an alternative method of repayment. Earlier this year, BlockFi returned over $500 million worth of crypto assets to nearly 130,000 clients through its Wallet Product.

BlockFi’s repayment endeavors began after the company successfully emerged from bankruptcy in October 2023. The company previously stated that customers with interest-bearing Earn accounts could expect to receive between 39.4% and 100% of the value held in their accounts. The bankruptcy filing followed the collapse of FTX, which had intended to rescue BlockFi before facing its downfall. According to documents filed in November 2022, BlockFi estimated having over 100,000 creditors with assets and liabilities totaling $1 billion to $10 billion.

As part of its ongoing efforts to maximize repayment values for clients, BlockFi is actively pursuing claims against FTX and Alameda Research. These claims, which are estimated to be valued at approximately $875 million, aim to boost the overall repayment amounts received by clients. By seeking legal recourse against entities involved in the lender’s bankruptcy and financial challenges, BlockFi is working towards ensuring that its customers are adequately compensated for their investments and losses.