BlockFi has announced its long-awaited client distribution via Coinbase will begin later this month.
The company says its client distributions will be processed in batches over the coming months, and eligible clients will receive a notification to the BlockFi account email on file. Non-US clients will have to wait, however, as BlockFi says their funds cannot be distributed due to “regulatory requirements” but it does not provide any details as to what those requirements are or when they will be met.
BlockFi shut down its web platform on May 31, 2024, at which time its clients no longer had access to the BlockFi platform and needed to open a Coinbase account if they wish the receive their remaining funds.
That move came approximately 18 months after BlockFi initially ceased allowing withdrawals from its platform on November 10th 2022, before declaring bankruptcy later the same month.
BlockFi / Coinbase Partnership for Ongoing Distributions
To ensure continuity of crypto withdrawals for eligible BlockFi Interest Account (BIA), Retail Loan, and Private Clients BlockFi has partnered with Coinbase.
The company says detailed instructions on how to create a Coinbase account were sent to eligible clients on May 9, 2024 and can be accessed here.
Clients who did not withdraw their digital assets from the BlockFi platform by the deadline of April 28, 2024, at 11:59 PM UTC, or did not complete an identity verification request by May 10, 2024, at 11:59 PM UTC, will still be able to access their funds in kind through Coinbase, provided they create or have an approved Coinbase account. Importantly,
- Clients who fail to create an approved Coinbase account may have their assets liquidated to cash and distributed accordingly, as per BlockFi’s bankruptcy plan.
- The Plan Administrator will use Coinbase for future rounds of distributions, including those based on funds recovered from FTX. Without this capability, subsequent distributions under the Plan would only be made in cash.
- Clients unable to open a Coinbase account will receive cash distributions, following the Plan’s provisions requiring cash distributions where crypto distributions are not feasible.
Security Warnings
With BlockFi now confirming a July start for Coinbase distributions, the company says to expect a surge in BlockFi and Coinbase related scams. BlockFi will not partner with any other providers for crypto distributions other than Coinbase. Clients are advised to access Coinbase directly through official channels and avoid clicking on any unsolicited links.
Official Communication Channels
BlockFi has highlighted the official channels through which it will communicate with clients:
- Email: BlockFi’s official emails
- Social Media: @BlockFi on social platforms
- Claims Agent: Kroll (blockfiinfo@ra.kroll.com or BlockFiBankruptcyNoticing@noticing.ra.kroll.com)
- Claims Distribution Partner: Digital Disbursements (noreply@digitaldisbursements.com)
- Coinbase: CBBlockFiExchDistro@coinbase.com
Clients are advised to avoid any communication from unofficial sources to prevent falling victim to fraud.
Background: BlockFi’s Bankruptcy and Halted Withdrawals
BlockFi halted withdrawals on November 10, 2022, shortly before filing for bankruptcy on November 28, 2022. The decision was influenced by its significant exposure to the collapsed FTX exchange and its affiliated hedge fund, Alameda Research. Since then, BlockFi has been navigating bankruptcy proceedings and working on restructuring efforts to stabilize its operations and safeguard client assets.
