Crypto lender BlockFi once valued at $3 billion is closing its website and taps Coinbase for distributions of funds recovered from bankrupt FTX.
BlockFi, which emerged from bankruptcy in 2023 following a series of cascading bankruptcies associated with the collapse of FTX, said in a blog post on May 9 that it plans to discontinue its web platform sometime in May.
Although the specific timetable still “remains under consideration given ongoing work and initial distribution,” the Jersey City-headquartered company says that after the deadline clients “will no longer be able to access the BlockFi platform.”
To ensure the distribution of debts among creditors and customers, BlockFi has partnered with crypto exchange Coinbase to provide “continuity of crypto withdrawals” for “eligible” customers. Further instructions regarding withdrawals via Coinbase will be communicated to eligible customers via their registered email accounts, the blog post reads.
“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 who are 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 any other important data from the platform before the shutdown date.
BlockFi’s journey through bankruptcy began in November, with the company filing for Chapter 11 protection due to volatility in crypto markets and its significant exposure to FTX. However, less than a year later, BlockFi successfully emerged from bankruptcy proceedings to start the process of repaying creditors.