Defunct centralized crypto lender BlockFi has approved the sale of FTX claims as its bankruptcy process nears completion.
BlockFi Completes the Sale of FTX Receivables
Mohsin Y. Meghji, the company's plan administrator and also Managing Partner of M3 Partners, filed the sale with the United States Bankruptcy Court for the District of New Jersey.
According to the statement, the sale process began on June 24 and closed on July 10 after the highest and best bid was determined “at a significant premium to their face value.” The claims were monetized through an undisclosed third party.
BlockFi reached an agreement in principle for $874.5 million with the heirs of FTX and Alameda Research in March. This settlement enabled the plan administrator to begin planning for subsequent distributions based on expected value to BlockFi creditors.
The sale will enable near-term final distribution of 100% of eligible customer and general unsecured creditor claims in fiat. “This transaction marks a final chapter in the liquidation and is the best possible outcome for BlockFi customers,” Meghji said.
These recoveries on customer claims and the timeline in which these recoveries would be distributed were unimaginable when these lawsuits were filed in November 2022. “We plan to begin end-customer distribution as soon as possible,” he said.
BlockFi shut down its web platform in May and announced last week that it would begin in-kind crypto distributions through Coinbase in July, with batch processing to occur in the coming months.
However, fiat requests from BlockFi customers are not processed by Coinbase. Eligible cash distributions are handled by Kroll and payment processing partner Digital Disbursements.
Customers outside the US are not eligible to receive funds at this time. “Distributions, particularly to BlockFi International creditors, may require additional identity verification and Know Your Customer diligence in accordance with international standards,” the firm said.
*This is not investment advice.
