Bankrupt crypto lender BlockFi announced on May 9th its decision to close its web platform by the end of May, shifting its primary distribution partner to Coinbase. This change aims to ensure continued access to withdrawals for BlockFi Interest Account (BIA), Retail Loan, and Private Clients as part of the bankruptcy claims process.

Crypto-eligible customers with an open or approved Coinbase account can access their funds in kind. This applies to those who didn't withdraw crypto from BlockFi's web platform by April 28 or verify their identity by May 10. Customers unable to create a Coinbase account will receive cash instead.

BlockFi stressed its exclusive partnership with Coinbase for distributions, cautioning users against scams from unauthorized parties claiming otherwise. BlockFi and Coinbase will contact affected users with instructions.

In BlockFi's bankruptcy case, the plan administrator may distribute funds recovered from FTX through Coinbase. BlockFi anticipated receiving nearly $875 million from FTX, with the first $250 million prioritized. The remaining amount hinges on FTX's ability to settle its own case.

Without Coinbase's involvement, BlockFi stated that the plan administrator could only offer cash distributions instead of crypto distributions going forward.

BlockFi initially halted withdrawals on November 10, 2022, citing uncertainties surrounding FTX's separate bankruptcy. Subsequently, BlockFi entered bankruptcy proceedings, revealing FTX as its second-largest creditor.

Although BlockFi emerged from bankruptcy in October 2023 and started paying users this year, FTX remains entangled in bankruptcy proceedings.