BlockFi Administrator Submits Plan in Court to Make Customers Whole

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.

Read More: BlockFi to Start Interim Crypto Distributions Through Coinbase This Month