TLDR
- Clients of the BlockFi estate will receive complete reimbursement for their eligible claims.
- Clients in the United States might see their funds arriving within a 90-day period.
- Those outside the US are subjected to extended waiting periods because of various regulatory constraints.
- Eligible US customers are required to establish a Coinbase account by August 23, 2024, to obtain their cryptocurrency assets.
- BlockFi has sold off its claims against FTX for more than they were initially worth.
The crypto lending firm BlockFi, which had gone bankrupt, has proclaimed plans to fully repay 100% of eligible claims to its users. This announcement has been met with enthusiasm by the crypto sector, as many have been eagerly monitoring the fallout from the FTX crisis and its repercussions on affiliated companies.
Filing for bankruptcy in November of 2022, BlockFi credits this favorable outcome to diligent recovery measures, especially the liquidation of its claims against FTX.
The company has disclosed that it was successful in offloading these claims for more than their nominal value, greatly enhancing its capacity to pay back its clientele.
Not all clients will experience the repayment process in the same way. According to the company, US-based clients should anticipate receiving their payments within the next 90 days. This timeline offers a glimmer of optimism amid the drawn-out and intricate bankruptcy proceedings.
BlockFi has shared the good news with their clients, affirming that due to the recovery efforts of the BlockFi Estate, they can expect to receive the full amount of their eligible claim.
— BlockFi (@BlockFi) July 25, 2024
Conversely, clients from outside the US may need to be a bit more patient. With BlockFi’s international operations being based in Bermuda, these clients encounter longer delays due to regulatory necessities.
The company elaborated that before any distributions to account holders outside the US can occur, additional identity verification and KYC procedures are obligatory.
United States clients eager to get their distributions in the form of crypto should take note of a crucial deadline set by BlockFi. Coinbase account By August 23, 2024, these clients must have their setup completed to obtain their claims as crypto assets.
If clients don't establish a Coinbase account or have already filed their claims by the deadline, their distributions will be disbursed in cash. It’s crucial to understand that the value of these claims will be calculated based on the 'dollarized petition date value,' indicating that the payouts will be equated to the asset's worth at the time BlockFi filed for bankruptcy, not at their current market value.
The focus of the BlockFi estate continues to be on safeguarding client assets while they solidify the final distribution strategy. This dedication complements broader initiatives in the crypto world to boost user protection and meet regulatory standards, especially after several noticeable bankruptcies took place in 2022.
BlockFi’s achievement in guaranteeing a 100% claim return is noteworthy in the landscape of cryptocurrency bankruptcies. Various other collapsed firms have unfortunately left their customers bearing considerable losses. BlockFi’s triumph here is largely attributed to reclaiming funds from FTX and Alameda Research, culminating in a settlement surpassing $874.5 million in principal.
The Editor-in-Chief at Blockonomi and inventor of Kooc Media, a UK-based digital media company. He supports Open-Source Software, Blockchain Technology, and Universal Internet Access.
