Bankrupt Crypto Lender BlockFi's Administrator Submits Plan to Make Customers Whole

Bankrupt crypto lender BlockFi's plan administrator has asked a U.S. court for an order for the final distribution to make customers and unsecured creditors whole.
"This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi," said Mohsin Y. Meghji, Plan Administrator of BlockFi Inc.

The administrator of crypto lender BlockFi is seeking an order which would provide for final distribution to all eligible customers and unsecured creditors, it announced on Monday.

The administrator filed a report to the U.S. Bankruptcy Court for the District of New Jersey. The report revealed that the administrator has closed a significant transaction, which allows them to monetize $874.5 million in claims against FTX at a substantial premium to their face value.

"This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi," said Mohsin Y. Meghji, Plan Administrator of BlockFi Inc. and Managing Partner of M3 Partners.

"These recoveries on customer claims, and the timeline those recoveries will be distributed on, were unimaginable when these cases were filed 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," Meghji concluded.

BlockFi was among the first victims of the contagion caused by the collapse of crypto exchange FTX in early November 2022. The crypto lender filed for Chapter 11 bankruptcy protection on Nov. 28, 2022, less than a month after halting withdrawals from the platform. BlockFi then began the process of asking the court to greenlight customer withdrawals that are locked up in the platform.

Last week, BlockFi announced it would commence the first interim crypto distributions through Coinbase (COIN) in July 2024.

Edited by Parikshit Mishra.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

BlockFi Administrator Submits Plan in Court to Make Customers Whole

The plan administrator revealed that a significant transaction had been closed which would enable a near-term final distribution of 100% for all eligible claims.