The bankrupt crypto lender will start distributing funds to clients via Coinbase later this month.
Bankrupt crypto lender BlockFi announced a significant step in its effort to repay its clients. In an X post on Wednesday, the lender noted that the first interim distribution of funds to clients through Coinbase will begin this month.
According to BlockFi, the interim distribution will commence in July and will be processed in batches in the coming months. The firm added that eligible clients will receive repayment notifications through the email linked to their BlockFi accounts.
Non-US Clients Restricted
BlockFi mentioned that clients outside the US cannot receive funds now due to regulatory requirements that apply to them.
The lender tapped Coinbase as its distribution partner in May to efficiently allocate funds to eligible BlockFi Interest Account (BIA), Retail Loan, and Private clients. The company noted that clients unable to open a Coinbase account at the time would receive cash.
Earlier this year, BlockFi refunded over $500 million worth of crypto from its Wallet Product to nearly 130,000 clients.
Exiting Bankruptcy
BlockFi’s repayment efforts commenced after the firm emerged from bankruptcy in October 2023. At the time, BlockFi stated that clients with interest-bearing Earn accounts would receive between 39.4% and 100% of the value in their accounts.
BlockFi filed for Chapter 11 bankruptcy protection in November 2022 following the implosion of FTX, which had agreed to rescue the lender before its own demise. In its bankruptcy filing in November 2022, the company estimated more than 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion.
The lender is still pursuing claims against FTX and Alameda Research to help increase clients’ repayment values. These claims are estimated to be worth around $875 million.