BlockFi, nearing the end of its bankruptcy process, has completed the sale of its FTX claims and is preparing for final distributions to creditors.
Points
- BlockFi has successfully sold its FTX claims at a substantial premium.
- The sale process began on June 24 and concluded on July 10.
- Proceeds from the sale will facilitate a near-term final distribution to BlockFi creditors.
- BlockFi shut down its web platform in May and announced in-kind crypto distributions via Coinbase.
- Non-U.S. clients are currently not eligible to receive funds.
BlockFi, the centralized crypto lender that filed for bankruptcy in November 2022, has announced the successful completion of the sale of its FTX claims. This marks a significant milestone in BlockFi’s bankruptcy process, bringing the firm closer to finalizing creditor distributions.
The sale, which began on June 24 and concluded on July 10, was conducted with the highest and best bid determined at a substantial premium to the claims’ face value. This successful transaction allows BlockFi to proceed with a near-term final distribution of 100% of eligible customer and general unsecured creditor claims in fiat terms, according to Mohsin Y. Meghji, BlockFi’s plan administrator and managing partner at M3 Partners.
“This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi,” said Meghji. “These recoveries on customer claims, and the timeline those recoveries will be distributed on, were unimaginable when these cases were filed in November 2022. We intend to commence the final customer distribution as quickly as reasonably practicable.”
BlockFi shut down its web platform in May and announced that it would begin in-kind crypto distributions via Coinbase in July, processed in batches over the coming months. However, BlockFi clients’ fiat claims are not being processed by Coinbase. Instead, eligible cash distributions are handled by Kroll and its payment processing partner, Digital Disbursements.
Non-U.S. clients, however, are not eligible to receive funds at this time. “Distributions to BlockFi International creditors, in particular, may require additional identity verification and Know Your Customer diligence in compliance with international standards,” the firm noted.
BlockFi’s collapse was part of a broader trend of failures among centralized crypto lending services following the tumultuous events of 2022. Other notable bankruptcies included Celsius, Voyager Digital, and Genesis, triggered by the collapse of the Terra ecosystem, FTX, and Three Arrows Capital （3AC）.
Cointelegraph
解説
- Significance of the FTX Claims Sale: The sale of FTX claims at a substantial premium provides BlockFi with the necessary funds to proceed with creditor distributions. This step is crucial for BlockFi’s recovery process and helps restore some value to its creditors.
- Final Distributions and Eligibility: BlockFi’s plan to commence final distributions in fiat terms marks a significant step towards resolving its bankruptcy case. The use of platforms like Coinbase and Kroll for processing distributions ensures that the process is efficient and secure.
- Impact of 2022 Crypto Lending Failures: BlockFi’s collapse is part of a larger trend of centralized crypto lending services facing significant challenges. The failures of firms like Celsius, Voyager Digital, and Genesis highlight the risks associated with the crypto lending sector and underscore the need for robust risk management practices.
BlockFi’s successful sale of FTX claims and its preparations for final creditor distributions represent critical steps towards concluding its bankruptcy process. These actions provide a path forward for creditors to recover their claims and bring closure to one of the notable crypto lending collapses of 2022.