Bankrupt Crypto Lender BlockFi to Commence Repayments This Month 

BlockFi, a bankrupt cryptocurrency lender, has announced a major step in its efforts to repay its customers. In a post on X on Wednesday, the lender noted that the first interim distribution of funds to customers through Coinbase will begin this month.

According to BlockFi, the temporary distribution will take place start In July and will be processed in batches over the coming months. The company added that eligible customers will receive payment notifications via email linked to their BlockFi accounts.

Non-US customers are prohibited.

BlockFi stated that customers outside the US cannot receive funds at this time due to regulatory requirements that apply to them.

The lender brought on Coinbase as a distribution partner in May to efficiently allocate funds to BlockFi Interest Accounts (BIA), retail loans, and eligible retail customers. The company noted that customers unable to open a Coinbase account at the time would receive the cash.

Earlier this year, BlockFi redeemed over $500 million in cryptocurrency from its wallet product to nearly 130,000 customers.

Getting out of bankruptcy

BlockFi’s repayment efforts began after the company emerged from bankruptcy in October 2023. At the time, BlockFi stated that customers with interest-bearing Earn accounts would receive between 39.4% and 100% of the value in their accounts.

BlockFi filed for Chapter 11 bankruptcy protection in November 2022 following the collapse of FTX, which agreed to bail out the lender before its demise. In its November 2022 bankruptcy filing, the company estimated that it had more than 100,000 creditors with assets and liabilities ranging from $1 billion to $10 billion.

The lender is still pursuing claims against FTX and Alameda Research to help increase customer repayments. These claims are valued at approximately $875 million.