BlockFi Begins Repayment Process for Customers, Distributing Bitcoin and Ethereum Through Coinbase

BlockFi, the crypto lender that faced a significant downfall last year, is set to begin returning Bitcoin and Ethereum to its former customers. This repayment process will be facilitated through Coinbase, the largest cryptocurrency exchange in the United States. The administrator overseeing the wind-down of BlockFi announced that it has achieved what it describes as the “best possible outcome for customers” affected by the firm’s collapse. This development marks a significant step toward compensating those who lost assets during the crisis.

To retrieve their funds, customers will need to have Coinbase accounts that match the information on their BlockFi profiles. The repayment process will involve ongoing attempts to distribute crypto assets on a weekly to monthly basis. Importantly, this service will only be available to U.S. customers, as Coinbase is not set to distribute funds to those outside the United States. Arranging payments for international creditors is being addressed through coordination with BlockFi International’s Joint Liquidators.

BlockFi ceased operations amid difficulties stemming from the wider fallout of the FTX collapse in 2022. The company, which had once boasted over $1.2 billion in assets linked to FTX and Alameda Research, initially paused withdrawals before filing for Chapter 11 bankruptcy in November 2022. The recent plan to return assets is viewed as a positive outcome for its customers, as it comes after the administrator reported successful recovery efforts through the sale of BlockFi’s claims against FTX at a premium.