- Coinbase may also allocate the money that FTX sends to BlockFi.
On May 9, the insolvent cryptocurrency lender BlockFi announced that it will close down its website by the end of the month and would mostly rely on Coinbase as a distribution partner.
The modification guarantees that withdrawals made as part of the bankruptcy claims procedure will still be available to BlockFi Interest Account (BIA), Retail Loan, and Private Clients.
Customers who qualify for cryptocurrency will be able to access funds in kind as long as their Coinbase account is active and authorized. Customers who qualify for cryptocurrency and who did not remove their funds from BlockFi’s online platform by April 28 or who did not authenticate themselves by May 10 are subject to this requirement.
Customers who qualify for cryptocurrency but choose not to open a Coinbase account or are unable to do so will get their money in cash instead.
Reiterating that it has not collaborated with any other cryptocurrency firms on distribution, BlockFi alerted consumers to potential scams from dishonest individuals pretending to be legitimate.
Users who are on file will receive instructions from BlockFi and Coinbase.
Any future payouts made by the plan administrator in BlockFi’s bankruptcy case, including those involving money retrieved from FTX, might be handled through Coinbase.
As of March, BlockFi was anticipated to receive close to $875 million from FTX. The remaining $250 million is contingent upon FTX’s capacity to pay clients in its own instance, with the first $250 million being given priority.
According to BlockFi, in the future, the plan administrator would only be able to distribute cash rather than cryptocurrency if Coinbase wasn’t involved.
On November 10, 2022, BlockFi first requested a halt to withdrawals, claiming FTX’s separate insolvency and a “lack of clarity” as the basis for their own shutdown. A few weeks later, BlockFi filed for bankruptcy, and FTX was identified as its second-biggest creditor.
In October 2023, BlockFi filed for bankruptcy and started paying consumers. FTX is still facing bankruptcy.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
