BlockFi Completes FTX’s Claim Sale Ahead of Bankruptcy Filing
BlockFi, the defunct centralized crypto lender, announced on July 25 the successful completion of the sale of its FTX claims, representing a crucial step towards the company’s wind-down, and promises full repayment to eligible creditors.
BlockFi plan administrator Mohsin Y. Meghji announced the sale of FTX claims, which began on June 24 and concluded on July 10. The bid was described as the “highest and best,” secured at a “substantial premium to their face value.”
BlockFi and FTX’s Settlement Details
While the exact details of the sale are undisclosed, the transaction was facilitated through an unnamed third party.
Massive #FTX claims sale by BlockFi: BlockFi’s $874m of claims includes a $439m general unsecured claim and a $250m secured claim, both against Alameda, and a $185m FTX customer claim. Bids are due by July 1, 2024. #bankruptcy #crypto pic.twitter.com/WK6aYtUPWn
— Claims Market (@claims_market) June 25, 2024
This development follows BlockFi’s $874.5 million in-principle settlement with the FTX and Alameda Research estates in March 2023.
The settlement cleared the way for the plan administrator to initiate preparations for subsequent distributions to BlockFi creditors.
“This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi,” Meghji said. “These recoveries on customer claims, and the timeline those recoveries will be distributed on, were unimaginable when these cases were filed in November 2022.”
The sale is expected to enable a “near-term” final distribution, covering 100% of eligible customer and general unsecured creditor claims in fiat terms. BlockFi will commence the final customer distribution “as quickly as reasonably practicable.”
On May 9, BlockFi shut down its web platform and announced plans to initiate temporary crypto distributions via Coinbase in July. Fiat claims will be handled by Kroll and Digital Disbursements, which are independent of Coinbase. These distributions will be processed in batches over the coming months.
Non-U.S. clients will face extra hurdles, however.
“Distributions to BlockFi International creditors, in particular, may require additional identity verification and Know Your Customer diligence in compliance with international standards,” the firm stated.
BlockFi’s Journey to Bankruptcy And Broader Context on Crypto Lending Sector
BlockFi’s woes began in November 2022 when it paused customer withdrawals and filed for Chapter 11 bankruptcy protection.
Today, BlockFi filed voluntary cases under Chapter 11 of the U.S. Bankruptcy Code.https://t.co/adaAx6me4r
— BlockFi (@BlockFi) November 28, 2022
The company, which provided interest-yielding deposit accounts and functioned similarly to a bank by loaning out user deposits to crypto industry clients, was one of several centralized crypto lenders to face major challenges in 2022.
The crypto lending sector experienced notable setbacks following the collapse of the Terra ecosystem, FTX, and Three Arrows Capital (3AC).
Other firms that filed for bankruptcy during this trying period include Celsius, Voyager Digital, and Genesis.
BlockFi’s financial troubles were largely attributed to its exposure through loans to Alameda Research, the hedge fund affiliated with FTX.
Despite these challenges, BlockFi managed to allow its Wallet customers to withdraw their funds in October 2023, providing some relief amid the ongoing bankruptcy proceedings.
The post BlockFi Completes FTX’s Claim Sale Ahead of Bankruptcy Filing appeared first on Cryptonews.
Read More
Moscow Releases Tax Calculator for Russian Crypto Miners
Trump’s Tariff Policies May Accelerate Interest In Crypto, Binance CEO Says
BlockFi Completes FTX’s Claim Sale Ahead of Bankruptcy Filing
BlockFi, the defunct centralized crypto lender, announced on July 25 the successful completion of the sale of its FTX claims, representing a crucial step towards the company’s wind-down, and promises full repayment to eligible creditors.
BlockFi plan administrator Mohsin Y. Meghji announced the sale of FTX claims, which began on June 24 and concluded on July 10. The bid was described as the “highest and best,” secured at a “substantial premium to their face value.”
BlockFi and FTX’s Settlement Details
While the exact details of the sale are undisclosed, the transaction was facilitated through an unnamed third party.
Massive #FTX claims sale by BlockFi: BlockFi’s $874m of claims includes a $439m general unsecured claim and a $250m secured claim, both against Alameda, and a $185m FTX customer claim. Bids are due by July 1, 2024. #bankruptcy #crypto pic.twitter.com/WK6aYtUPWn
— Claims Market (@claims_market) June 25, 2024
This development follows BlockFi’s $874.5 million in-principle settlement with the FTX and Alameda Research estates in March 2023.
The settlement cleared the way for the plan administrator to initiate preparations for subsequent distributions to BlockFi creditors.
“This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi,” Meghji said. “These recoveries on customer claims, and the timeline those recoveries will be distributed on, were unimaginable when these cases were filed in November 2022.”
The sale is expected to enable a “near-term” final distribution, covering 100% of eligible customer and general unsecured creditor claims in fiat terms. BlockFi will commence the final customer distribution “as quickly as reasonably practicable.”
On May 9, BlockFi shut down its web platform and announced plans to initiate temporary crypto distributions via Coinbase in July. Fiat claims will be handled by Kroll and Digital Disbursements, which are independent of Coinbase. These distributions will be processed in batches over the coming months.
Non-U.S. clients will face extra hurdles, however.
“Distributions to BlockFi International creditors, in particular, may require additional identity verification and Know Your Customer diligence in compliance with international standards,” the firm stated.
BlockFi’s Journey to Bankruptcy And Broader Context on Crypto Lending Sector
BlockFi’s woes began in November 2022 when it paused customer withdrawals and filed for Chapter 11 bankruptcy protection.
Today, BlockFi filed voluntary cases under Chapter 11 of the U.S. Bankruptcy Code.https://t.co/adaAx6me4r
— BlockFi (@BlockFi) November 28, 2022
The company, which provided interest-yielding deposit accounts and functioned similarly to a bank by loaning out user deposits to crypto industry clients, was one of several centralized crypto lenders to face major challenges in 2022.
The crypto lending sector experienced notable setbacks following the collapse of the Terra ecosystem, FTX, and Three Arrows Capital (3AC).
Other firms that filed for bankruptcy during this trying period include Celsius, Voyager Digital, and Genesis.
BlockFi’s financial troubles were largely attributed to its exposure through loans to Alameda Research, the hedge fund affiliated with FTX.
Despite these challenges, BlockFi managed to allow its Wallet customers to withdraw their funds in October 2023, providing some relief amid the ongoing bankruptcy proceedings.
The post BlockFi Completes FTX’s Claim Sale Ahead of Bankruptcy Filing appeared first on Cryptonews.
Read More
Moscow Releases Tax Calculator for Russian Crypto Miners