In a recent announcement, crypto lender BlockFi revealed its plans to shut down its web platform and collaborate with Coinbase to distribute funds to its clients. This decision comes after BlockFi filed for bankruptcy in November 2022 following FTX’s collapse. The CEO of BlockFi, Zac Prince, attributed the company’s bankruptcy to the actions of FTX’s founder, Bankman-Fried, with whom he had testified in a criminal trial. In 2023, BlockFi announced its intention to return customers’ crypto holdings and set a deadline for withdrawal requests by April 28, 2024.
With the deadline for withdrawals from BlockFi’s platform passing, the company informed clients about the option to set up a Coinbase account to access their digital assets. Eligible clients, including BlockFi Interest Account holders and Retail Loan clients, can now withdraw their crypto holdings through Coinbase. For those who missed the withdrawal deadline, there is still an opportunity to withdraw from BlockFi’s platform, albeit with the risk of having their assets liquidated into cash and distributed accordingly.
The plan administrator overseeing BlockFi’s closure will utilize Coinbase for upcoming distribution rounds, potentially involving recovered funds from the FTX collapse. Without this partnership, the administrator would be limited to distributing cash for subsequent rounds. It’s worth noting that BlockFi does not plan to engage with any other providers for cryptocurrency distributions, urging investors to be wary of potential scam attempts from third-party entities. Past incidents of fraudulent activity targeting BlockFi clients highlight the need for vigilance and caution.
BlockFi advises customers to retrieve their transaction history, tax documents, and any other essential information from the platform before the shutdown. This proactive approach ensures that clients have access to critical data post-closure. By partnering with Coinbase, BlockFi aims to facilitate a smooth transition for clients looking to withdraw their digital assets securely. The collaboration with Coinbase represents a strategic move to streamline the asset distribution process and uphold transparency in the aftermath of BlockFi’s closure.
BlockFi’s decision to partner with Coinbase for fund distribution reflects a strategic effort to address the fallout from its bankruptcy and provide clients with a reliable means of accessing their crypto holdings. By leveraging Coinbase’s platform, BlockFi seeks to enhance the efficiency and security of asset withdrawals, mitigating risks associated with the closure of its web platform. As clients navigate the transition process, staying informed and following the guidance provided by BlockFi will be crucial in safeguarding their assets and financial interests.