Crypto Lending Platform BlockFi Announces Shutdown, Turns to Coinbase for Asset Distribution
Embattled digital asset lending platform, BlockFi has announced an imminent shutdown of its platform in May after recovering from Bankruptcy. The company which previously declared bankruptcy following the collapse of the FTX exchange, has turned to Coinbase as its distribution partner for the recovered funds. 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.
BlockFi to Distribute Recovered Funds Through Coinbase
In a recent announcement dated May 9, BlockFi revealed that it has partnered with Coinbase, one of the leading global exchanges as its distribution partner to provide continuity of crypto withdrawals for eligible customers. According to the announcement, crypto-eligible customers who failed to withdraw their asset distribution from the platform by the deadline of April 28 at 11:59 PM UTC or who did not authenticate themselves by completing identity verification by May 10 can withdraw their funds if they have an open and approved Coinbase account.
Additionally, clients who fail to make their withdrawal from the BlockFi platform at the withdrawal deadline and who also do not create an approved account with Coinbase will be able to liquidate their in-kind distribution to cash, according to the plan.
Furthermore, BlockFi informs that clients who are unable to create a Coinbase account will get their distributions in cash according to the provisions of the Plan that give room for cash distributions in cases where it is impossible to make crypto distributions.
Ultimately, BlockFi advised clients to be weary of fraud, stressing that it is partnering with only Coinbase and no other exchange for this purpose as scammers could cease the initiative to reach out to affected clients, acting as intermediaries and distribution partners.
BlockFi to Shutdown in May
Meanwhile, in the same statement, BlockFi revealed that it will shut down the platform sometime in May. Even though an exact date wasn’t given as a result of the ongoing work and asset distribution, BlockFi informs clients that they will not be able to access the platform after this month, adding that the exact date will be announced in the coming weeks. Moreover, BlockFi advises clients to prepare for this by downloading their documents including transaction history, tax forms, and any other important data from the platform before the shutdown date.
Due to the volatility of the cryptocurrency markets and its substantial exposure to FTX, BlockFi filed for Chapter 11 protection in November, initiating its path through bankruptcy. But less than a year later, BlockFi was able to effectively exit bankruptcy proceedings and begin paying back creditors.
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