BlockFi partners with Coinbase to distribute assets recovered from FTX

Crypto lender BlockFi, once valued at $3 billion, is shutting down its website and using Coinbase to distribute funds rescued from bankrupt FTX.

BlockFi, which emerged from bankruptcy in 2023 after a series of consecutive bankruptcies linked to the collapse of FTX, said in a May 9 blog post that it plans to shut down its web platform in May.

Although a specific timeline is still under consideration given ongoing work and initial deployment, the Jersey City-based company says customers will “no longer be able to access the BlockFi platform” after the deadline.

BlockFi is pleased to announce Coinbase as our distribution partner to ensure continuity of cryptocurrency withdrawals available to our eligible BlockFi Interest Account (BIA), Retail Credit and Private customers.

— BlockFi (@BlockFi) May 9, 2024

To ensure the distribution of debts between creditors and customers, BlockFi has partnered with crypto exchange Coinbase to ensure “continuity of cryptocurrency withdrawals” for “eligible” customers. Further instructions regarding withdrawals through Coinbase will be communicated to eligible customers via their registered email accounts, the blog post states.

“The Plan Administrator will have the ability to use Coinbase for future rounds of distributions, including distributions based on funds recovered from FTX.” BlockFi

For those unable to open a Coinbase account, BlockFi assured that all distributions “will be made in cash.” Customers are advised to download their transaction history, tax forms and other important data from the platform before the closing date.

BlockFi’s bankruptcy journey began in November when the company filed for Chapter 11 protection due to volatility in crypto markets and significant exposure to FTX. But less than a year later, BlockFi successfully emerged from bankruptcy to begin the process of repaying creditors.