BlockFi, the bankrupt crypto lending platform, is set to initiate its first temporary distribution of crypto assets through Coinbase starting in July. Eligible account holders will receive email notifications about the distribution, which will occur in batches over the coming months. However, due to regulatory constraints, non-US customers will not receive any funds.
BlockFi Partners with Coinbase for Distribution
In May, BlockFi announced a partnership with Coinbase to facilitate the continuity of crypto withdrawals for eligible BlockFi Interest Account (BIA), Retail Loan, and Private Clients. As the initial window for requesting a withdrawal of estate funds using BlockFi has closed, the platform is now collaborating with Coinbase to manage the next steps.
BlockFi will provide clients with further details via email, including instructions on how to create a Coinbase account. For those who missed the withdrawal deadline of April 28 or failed to complete identity verification by May 10, there is still an opportunity to receive funds. These assets will be made available in kind if the individual has an open and approved Coinbase account. If an approved Coinbase account is not created, the assets may be converted to cash and distributed accordingly, as outlined in the plan.
To facilitate future distributions, including those based on funds recovered from FTX, the Plan Administrator will utilize Coinbase as the platform of choice. Without this partnership, the Administrator would only be able to distribute cash in subsequent rounds. Clients who are unable to open a Coinbase account will receive their distributions in cash.
BlockFi’s Bankruptcy and Creditor Details
BlockFi became the first company to file for bankruptcy following the collapse of FTX. The crypto lender has over 100,000 creditors and owes between $1 billion and $10 billion to them.
BlockFi Warns Against Scam Attempts
BlockFi has cautioned its clients to remain vigilant against scam attempts from third-party actors falsely claiming to offer crypto distributions. The firm emphasized that it will not be partnering with any other providers for crypto distributions. This warning comes as crypto scammers have been targeting the creditors of bankrupt digital asset firms FTX and BlockFi.
In March, claimants of FTX and BlockFi received fraudulent emails that appeared legitimate, promising instant withdrawals of their remaining balances. Security expert Plumferno highlighted these scams in a thread on X, noting that the emails appeared to come from the BlockFi restructuring team with an update on their court case. The perpetrators utilized a network of compromised emails from MailerLite’s data breach that occurred in January.
“It is very likely these emails are due to the MailerLite database breach in January,” Plumferno noted. “This is because the same sender info is present on both these fake BlockFi emails.”
In summary, BlockFi’s partnership with Coinbase aims to ensure a smooth distribution of crypto assets to eligible account holders, while the company remains vigilant against potential scams targeting its clients.
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