TLDR
- BlockFi estate clients are expected to receive 100% of their eligible claims.
- US clients may receive their distributions within 90 days.
- International clients face longer wait times due to regulatory requirements.
- Eligible US clients need to set up a Coinbase account by August 23, 2024 to receive crypto assets.
- BlockFi sold its FTX claims for an amount exceeding their face value.
The bankrupt crypto lending platform BlockFi has announced plans to return 100% of eligible claims to its clients. This development comes as welcome news to many in the crypto community who have been closely watching the aftermath of the FTX collapse and its impact on related companies.
BlockFi, which filed for bankruptcy in November 2022, attributes this positive outcome to successful recovery efforts, particularly the sale of its outstanding claims against FTX.
The company reported that it managed to sell these claims for an amount exceeding their face value, a move that has significantly boosted its ability to repay clients.
The repayment process, however, will not be uniform for all clients. US-based customers can expect to receive their distributions within the next 90 days, according to the company. This relatively quick timeline for US clients is a bright spot in what has been a long and complicated bankruptcy process.
BlockFi is pleased to announce that, based on the BlockFi Estate’s recovery efforts, clients can now expect to receive 100% of your eligible claim from the BlockFi Estate.
— BlockFi (@BlockFi) July 25, 2024
International clients, on the other hand, may need to exercise more patience. Due to regulatory requirements in Bermuda, where BlockFi’s international operations were based, these clients face a longer wait.
The company explained that additional identity verification and “Know Your Customer” (KYC) procedures will be necessary before distributions can be made to international account holders.
For US clients looking to receive their distributions in cryptocurrency, BlockFi has set an important deadline. These clients must set up a Coinbase account by August 23, 2024, to receive their claims in crypto assets.
Those who do not set up a Coinbase account, or who have already submitted their claims to BlockFi by the specified deadline, will receive their eligible distributions in cash.
It’s important to note that the value of the claims will be based on the “dollarized petition date value.” This means that the amount clients receive will be calculated based on the value of their assets at the time of BlockFi’s bankruptcy filing, not their current market value.
The BlockFi estate has emphasized its commitment to prioritizing the safety of client assets while working on the final distribution plan. This approach aligns with broader efforts in the crypto industry to enhance user protection and regulatory compliance following several high-profile bankruptcies in 2022.
BlockFi’s ability to return 100% of eligible claims stands out in the context of crypto company bankruptcies. Many other failed crypto firms have left clients with significant losses. The company’s success in this regard is largely due to its recovery of funds from FTX and Alameda Research, reaching a settlement of over $874.5 million in principal.
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