In a surprising turn of events, crypto lender BlockFi has recently announced its plans to close its web platform this month. However, it has also introduced a partnership with Coinbase to facilitate the distribution of funds to its clients. This move comes after BlockFi filed for bankruptcy back in November 2022 following the collapse of FTX. CEO Zac Prince has attributed the firm’s bankruptcy to the actions of FTX founder Bankman-Fried, pointing to a direct correlation between the two events.
As part of its partnership with Coinbase, BlockFi clients with eligible accounts, including BlockFi Interest Account, Retail Loan, and Private Clients, will now have the ability to withdraw their crypto holdings. While the deadline for most customers to request withdrawals was set for April 28, 2024, BlockFi is now offering another opportunity for those who missed the initial deadline. Clients who fail to set up an approved Coinbase account may have their assets liquidated into cash and distributed accordingly.
Plan for Asset Distribution
The plan administrator will utilize Coinbase for upcoming distribution rounds, potentially involving distributions from recovered funds from FTX. Without this partnership, the administrator would be limited to distributing cash for subsequent rounds. BlockFi has made it clear that it does not intend to collaborate with any other providers for cryptocurrency distributions, urging investors to be cautious of potential scam attempts from third parties.
Given BlockFi’s history of being targeted by fraudulent activities, the company is urging customers to stay vigilant and avoid falling prey to scams. In the past, claimants have received deceptive emails posing as legitimate communications, falsely promising immediate withdrawals of remaining balances. As the shutdown of the platform approaches, customers are advised to retrieve their transaction history, tax documents, and any other essential information from BlockFi to safeguard their interests.
The partnership between BlockFi and Coinbase marks a new chapter for the embattled crypto lender. By providing clients with the opportunity to withdraw their digital assets through Coinbase, BlockFi is taking steps to ensure a smooth transition for its investors. Despite the challenges faced by the company in the past, this collaboration with Coinbase signifies a commitment to resolving issues and prioritizing investor interests.
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