Bankrupt Cryptocurrency Lender BlockFi to Begin Temporary Distribution Through Coinbase in July

Bankrupt cryptocurrency lending service BlockFi is poised to initiate its first temporary distribution of digital assets through Coinbase beginning in July.

In a recent update on X, the company indicated that eligible account holders should anticipate receiving email notifications concerning the distribution, which will occur in phases over the upcoming months.

It is crucial to highlight that non-US clients will not receive any funds due to regulatory limitations.

BlockFi Partners with Coinbase for Distribution

In May, BlockFi revealed a collaboration with Coinbase to guarantee the ongoing availability of cryptocurrency withdrawals for qualifying BlockFi Interest Account (BIA), Retail Loan, and Private Clients.

With the initial period for requesting a withdrawal of estate funds through BlockFi now closed, the platform is currently coordinating with Coinbase to facilitate the subsequent steps.

BlockFi will send clients additional information via email, including guidance on how to set up a Coinbase account.

For individuals who missed the withdrawal deadline of April 28 or did not complete identity verification by May 10, there remains a chance to access funds.

These assets will be distributed in kind if the individual possesses an open and approved Coinbase account.

Conversely, if an approved Coinbase account is not established, the assets may be converted to cash and allocated accordingly, as specified in the plan.

To enable future distributions, including those based on funds recovered from FTX, the Plan Administrator will use Coinbase as the preferred platform.

Without this collaboration, the Administrator would only be able to distribute cash in future rounds.

Clients who are unable to create a Coinbase account will receive their distributions in cash.

For all information related to Coinbase distribution, please visit the Coinbase Help Page (https://t.co/v4EBAKTd1X) and the BlockFi Client FAQs page (https://t.co/AGJcdrDNdh).

— BlockFi (@BlockFi) July 17, 2024

BlockFi was the first entity to file for bankruptcy following the collapse of FTX.

The cryptocurrency lender has over 100,000 creditors and owes between $1 billion and $10 billion to these creditors.

BlockFi Issues Warning Against Scam Attempts

The company also advised its clients to stay alert against scam attempts from third-party individuals falsely claiming to provide cryptocurrency distributions.

The crypto lender emphasized that it will not collaborate with any other providers for cryptocurrency distributions.

This warning was issued as crypto scammers have been targeting the creditors of bankrupt digital asset companies FTX and BlockFi.

In March, claimants from FTX and BlockFi received seemingly legitimate fraudulent emails enticing them with promises of immediate withdrawals of their remaining balances.

“The emails appear to originate from the BlockFi restructuring team with an update on their court case and offer affected users the opportunity to withdraw their remaining balances,” security expert Plumferno highlighted in a thread on X.

Plumferno noted that the perpetrators used a network of compromised emails from Mailer Lite’s data breach that occurred in January.

“It is highly probable that these emails are a result of the MailerLite database breach in January,” Plumferno remarked. “This is due to the fact that the same sender information is present on both these fraudulent BlockFi emails.”

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