🌎 BlockFi Sells Claims Against FTX, Plans 100% Payout to Creditors

BlockFi has announced the sale of its claims against FTX, facilitating a near-term final distribution of 100% to all allowed customer and unsecured creditor claims.

BlockFi’s Plan Administrator Confirms the Sale

BlockFi’s plan administrator, Mohsin Y. Meghji, confirmed the sale of claims against FTX, marking a significant step in the wind-down process. Meghji stated, “This transaction is the best possible outcome for BlockFi’s customers. The recoveries on customer claims and the timeline for distribution were unimaginable when these cases were filed in November 2022.”

Settlement and Monetization

The sale follows a March 2024 settlement with the now-defunct crypto exchange FTX, securing BlockFi over $874 million in claims against both FTX and its affiliate Alameda Research. This settlement allowed the plan administrator to monetize these claims through a third-party sale, with approval from relevant authorities.

Compliance and Verification

The press release also noted that BlockFi International creditors may require additional identity verification and KYC compliance to meet international standards.

Repayment Timeline

The announcement comes after BlockFi recently stated that it would begin repaying creditors in July, nearly two years after filing for bankruptcy following FTX’s collapse. The New Jersey-based company mentioned that distributions would be made “in batches in the coming months” via Coinbase, with eligible clients receiving notifications through their BlockFi account emails.

Regulatory Constraints for Non-U.S. Clients

However, non-U.S. clients will still be unable to receive funds due to regulatory constraints, and no specific timeline for these repayments has been provided. BlockFi filed for Chapter 11 protection in November 2022 amid market turmoil and significant exposure to the FTX exchange.