Bitrabo Editorial
BlockFi, a crypto lending firm that went bankrupt in 2022 due to FTX crypto exchange’s downfall, has sold its FTX claims successfully. This move signifies progress in BlockFi’s bankruptcy process and sets the stage for the ultimate distribution of funds to creditors.
On Monday, BlockFi announced the completion of the sale of its FTX claims at a premium to their face value. The sale aims to ensure a prompt final distribution of 100% to all approved customers and general unsecured creditors.
‘Optimal Outcome for Customers’
The plan administrator for BlockFi, Mohsin Y. Meghji, revealed that the closure of the deal monetizing all claims against FTX has been reported to the US Bankruptcy Court for the District of New Jersey. Meghji considers this outcome the best possible for BlockFi’s customers, surpassing initial expectations from when the bankruptcy proceedings began in November 2022.
“These results, achieved through tireless efforts by various parties, are remarkable. We intend to commence the Final Customer Distribution as quickly as reasonably practicable.”
In March 2024, BlockFi settled with FTX and Alameda Research, FTX’s trading arm, resulting in BlockFi obtaining $874.5 million in claims against them. This settlement set the stage for subsequent distributions to BlockFi customers contingent on anticipated FTX distributions, with the key option for the plan administrator to monetize the FTX claims through a third-party sale.
BlockFi’s Platform Inactive, Repayment Advances
As of June, the plan administrator ascertained the feasibility of selling the FTX claims at a level optimizing customer returns and benefiting subordinate creditors. The sale process kicked off on June 24, 2024, and wrapped up on July 10, 2024, with the acceptance of the highest and best bid, surpassing the face value of the FTX claims, bringing significant value to BlockFi and its creditors.
BlockFi’s platform is now inactive, and any ‘in-kind’ distributions will be managed through the plan administrator’s collaboration with Coinbase. Users have reported receiving notifications from Coinbase confirming successful matching of their details with BlockFi’s data.
Despite the progress in BlockFi’s bankruptcy proceedings, recent reports indicated a mix of excitement and skepticism among customers regarding the repayment developments. Some customers expressed enthusiasm, viewing the news positively, while others remained cautious and emphasized the importance of funds reflecting in their Coinbase accounts.
Featured image from DALL-E, chart from TradingView.com