By
Chimamanda U. Martha
May 20th, 2024
The deadline for most BlockFi customers to withdraw their crypto holdings was April 28, 2024. But the company is now offering a way for those who missed the first chance.
The crypto lender BlockFi is closing its platform, marking a significant shift in the wake of its 2022 bankruptcy. The New Jersey-based company announced on May 9, 2024, that it would shut down its web platform by the end of the month. This move is part of a crucial partnership with the cryptocurrency exchange Coinbase, which will help distribute BlockFi’s crypto holdings to eligible users.
The decision to shut down BlockFi’s platform signifies the end of an era for the company. Previously, BlockFi offered interest-bearing accounts and other crypto lending products. However, the fallout from the FTX collapse in November 2022 had a devastating impact on BlockFi, ultimately leading to its bankruptcy filing.
BlockFi CEO Zac Prince publicly attributed the company’s downfall to the actions of FTX founder Sam Bankman-Fried, who has been sentenced to 25 years in prison for a massive fraud.
BlockFi Partners with Coinbase for Withdrawals
The deadline for most BlockFi customers to withdraw their crypto was April 28, 2024. But the company is now offering a way for those who missed the first chance. Through its partnership with Coinbase, BlockFi will allow eligible users with BlockFi Interest Accounts (BIAs), Retail Loans, and Private Client accounts to access their crypto assets.
The withdrawal process involves creating a Coinbase account, either a new one or an existing one. Users who successfully complete this step can then withdraw their crypto holdings directly from Coinbase. But for those who choose not to use Coinbase, BlockFi will, as a last resort, sell their assets and distribute the cash equivalent.
This partnership with Coinbase is a strategic move for BlockFi. The plan administrator can now distribute not only existing funds but also potentially recovered assets from the ongoing FTX bankruptcy proceedings. Using Coinbase allows for continued cryptocurrency distribution rather than solely cash payouts in future rounds.
Secure Crypto Distributions with Coinbase
BlockFi has announced that Coinbase is the only chosen partner for distributing crypto assets, warning its users to be cautious about potential scams. The company has a history of being targeted by fraudulent activities, with some users receiving misleading emails that appear to be from legitimate sources and promise immediate withdrawals.
As the platform shutdown approaches, BlockFi has advised users to download their transaction history, tax documents, and any other relevant information before the platform goes offline. This ensures that users can easily access their financial records even after BlockFi stops operating.
The closure of BlockFi’s platform marks an important event in the ongoing story of the company’s bankruptcy. While the partnership with Coinbase provides a way for user funds to be distributed, it also indicates a changing landscape for crypto lending in the wake of significant industry upheavals.