BlockFi has gained $250 in USDC through Coinbase Prime. The on-chain holdings of Block Fi now stand up to $300M. This raises the question if BlockFi will start repaying the creditors.
Earlier in July, BlockFi had announced that it plans to return 100 percent of claims of the distressed clients. US-based creditors will be the first ones to get the payback. While the international creditors will have to wait longer as per Bermuda’s regulatory requirements.
BLOCKFI RECEIVED $250M – REPAYMENTS SOON?
BlockFi received $250M in USDC from Coinbase Prime, bringing their on-chain holdings up to $300M.
Will creditor repayments be starting soon? pic.twitter.com/qabVMqBAqw
— Arkham (@ArkhamIntel) September 23, 2024
The collapsed crypto lending platform will base the claims on the bankruptcy details rather than the current market value according to a previous announcement.
BlockFi filed for Chapter 11 bankruptcy on November 28, 2022, right after FTX collapsed. They paused withdrawals just before filing, blaming the uncertainty around FTX’s finances.
Since then, they’ve been trying to recover assets and sort out claims from their clients. Final payouts are expected in 90 days, so the victims could see their money by late December.
International clients might have to wait longer because Bermuda’s regulations require extra identity checks before funds can be released.
Meanwhile FTX is actively working towards a liquidation plan that can repay its customers. Reportedly, the company has recovered around $16 billion that can be used.
A court hearing is scheduled for October 7th where the Bankruptcy Court for the District of Delaware will consider the proposed Plan of Reorganization.
If approved, the plan will let FTX repay over 98% of its customers and unsecured creditors in full, WITH interest.
Customers are expected to receive about 118% of their claims in cash, calculated using a fixed bitcoin price of **$16,871** at the time of bankruptcy.
Some customers are not happy with the repayment structure because Bitcoin’s value has increased by nearly $40,000 since the collapse.
FTX’s management has explained that they cannot favor one creditor over another without jeopardizing fairness across all claims.
The upcoming court hearings on October 22, November 20, and December 12 will further explore how claims will be categorized and processed for repayment.
If the court confirms the reorganization plan, the payments could start before the end of the year.
