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BlockFi

BlockFi Clears FTX-Related Claims, Readies For Final Creditor Distributions

Ronaldo Marquez
by Ronaldo Marquez
1 year ago
·
Posted in Crypto News
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Crypto lending company BlockFi, which filed for bankruptcy in 2022 following the collapse of crypto exchange FTX, announced on Monday the successful sale of its FTX claims. This marks another step towards completing BlockFi’s bankruptcy process, allowing for the final distribution of funds to creditors. 

According to Monday’s announcement, the sale of FTX claims was completed at a “substantial” premium to their face value, which the plan administrator said is intended to ensure a “near-term” final distribution of 100% to all allowed customers and general unsecured creditors.

‘Best Possible Outcome For Customers’

BlockFi’s plan administrator, Mohsin Y. Meghji, disclosed in the announcement that he had filed a report to the United States Bankruptcy Court for the District of New Jersey, confirming the transaction’s closing that monetizes all claims against FTX. 

Related Reading: Spot Ethereum ETFs Launch: Here’s Why ETH Has Turned The Regulatory Corner

Meghji believes this is the “best possible outcome” for BlockFi’s customers, even stating that it exceeds expectations from when the bankruptcy cases were first filed in November 2022. Meghji further said:

…These results, achieved through tireless efforts by various parties, are remarkable. We intend to commence the Final Customer Distribution as quickly as reasonably practicable

As reported by Bitcoinist, in March 2024, BlockFi settled with FTX and the bankrupt crypto exchange’s trading arm, Alameda Research, enabling BlockFi to receive $874.5 million in claims against them. 

This settlement paved the way for subsequent distributions to BlockFi customers based on anticipated FTX distributions. An important aspect of the settlement was the plan administrator’s option to monetize the FTX Claims through a third-party sale.

BlockFi’s Platform Inactive, Repayment Progresses

Just a month ago, in June, the plan administrator determined that a sale of the FTX Claims at a level that maximized customer returns and generated significant recoveries for subordinated creditors was feasible. 

The sale process commenced on June 24, 2024, and concluded on July 10, 2024, with the highest and best bid acceptance. Interestingly, the purchase price exceeded the face value of the FTX Claims, providing substantial value to BlockFi and its creditors.

It was also disclosed that BlockFi’s platform is no longer active, and any “in-kind” distributions will be facilitated through the plan administrator’s collaboration with Coinbase. In the wake of this, users have reported receiving notifications from the US-based exchange, indicating successful matching of their identifying information with BlockFi’s data. 

Related Reading: Odds Of Trump Announcing A Strategic Bitcoin Reserve Slim: Prediction Platform

However, despite the sense of progress in the bankrupt crypto lender’s bankruptcy proceedings, Bitcoinist also reported on July 19 that while many customers expressed excitement and viewed the repayment development as positive news, some remained skeptical and stressed the need to see the funds deposited into their Coinbase accounts.

BlockFi
The 1-D chart shows the total crypto market cap’s rising valuation. Source: TOTAL on TradingView.com

Featured image from DALL-E, chart from TradingView.com 

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Ronaldo Marquez

Ronaldo Marquez

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Ronaldo is a seasoned crypto enthusiast with over four years of experience in the field. He is passionate about exploring the vast and dynamic world of decentralized finance (DeFi) and its practical applications for achieving economic sovereignty. Ronaldo is constantly seeking to expand his knowledge and expertise in the DeFi space, as he believes it holds tremendous potential for transforming the traditional financial landscape.

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