- BlockFi, the insolvent crypto lending company, is set to begin payments to its users this month.
- The company has announced that it will distribute cryptocurrencies via Coinbase, in alignment with a previous agreement.
- BlockFi’s insolvency, filed in November 2022, was largely due to loans made to Alameda, a subsidiary of the now-bankrupt crypto firm FTX.
BlockFi initiates the distribution of cryptocurrency payments to users through Coinbase in a strategic move to honor prior agreements.
BlockFi Set to Distribute Payments Using Coinbase
The defunct crypto lender BlockFi has revealed its plan to commence payments to its users, utilizing Coinbase as the primary platform for cryptocurrency distribution. This move comes after the company’s bankruptcy declaration in November 2022, which stemmed from its financial entanglements with Alameda, a FTX-related entity. This new development aims to provide some relief to BlockFi’s creditors.
How Users Can Access Their Funds
In an effort to ensure smooth transactions, BlockFi will guide eligible users on how to establish a Coinbase account through email communications. For those who already have a Coinbase account, the completion of Know Your Customer (KYC) protocols will be mandatory to receive payments. Payments will be distributed in Bitcoin (BTC), Ethereum (ETH), and USDT for users with active Coinbase accounts. For others, payments will be rendered in cash.
Impact of External Market Conditions on Bitcoin Prices
During the period from June 19 to July 12, Bitcoin faced significant selling pressure due to the German government’s liquidation of BTC holdings. Although this caused Bitcoin prices to drop to as low as $55,000, the absence of further sales from Germany has allowed Bitcoin to recover. This external market factor exemplifies the volatile nature of cryptocurrencies and the impact of large-scale transactions on asset prices.
Continued Payments to Eligible Users
BlockFi has also confirmed that users eligible for payments but who have not yet withdrawn their funds by April 28 or completed identity verification by May 10 will still receive their due payments. However, this reimbursement phase will be limited to customers based in the United States.
Conclusion
As BlockFi begins its user payment process via Coinbase, the move signifies a strategic effort to fulfill prior financial obligations and provide much-needed restitution to affected users. This initiative underscores the importance of asset recovery efforts in the aftermath of crypto firm bankruptcies, offering a glimpse of optimism for creditors awaiting their dues.
