BlockFi to shut down web platform, turn to Coinbase as distribution partner

BlockFi, the bankrupt crypto lender, has announced that it will be shutting down its web platform by the end of May. As part of the bankruptcy claims process, BlockFi will rely primarily on Coinbase as its distribution partner. This move will ensure that BlockFi Interest Account (BIA), Retail Loan, and Private Clients can continue to access withdrawals. Crypto-eligible customers who have an open or approved Coinbase account will be able to access their funds in kind. However, customers who did not withdraw their crypto from BlockFi’s web platform by April 28 or did not verify their identity by May 10 will receive funds in cash if they cannot create a Coinbase account. It is important to note that BlockFi has not partnered with any other crypto companies for distributions and warns its users about potential scams from bad actors. BlockFi and Coinbase will reach out to users with instructions. In addition, the plan administrator in BlockFi’s bankruptcy case may distribute funds recovered from FTX through Coinbase, but this depends on FTX’s ability to pay its own customers. Without Coinbase’s involvement, the plan administrator would only be able to make cash distributions going forward. BlockFi initially halted withdrawals in November 2022 due to a “lack of clarity” surrounding FTX’s bankruptcy. BlockFi later entered bankruptcy proceedings and emerged in October 2023, beginning to pay users this year. FTX, on the other hand, remains in bankruptcy proceedings.