Defunct lending platform BlockFi has secured claims from FTX, allowing it to repay customers and creditors whose funds were tied because it failed in 2022. Its plan administrator, Mohsin Y. Meghji, submitted a report to the U.S. Bankruptcy Court for the District of New Jersey, stating BlockFi closed a transaction, letting it monetize about $874.5 million.

According to a press release issued by the firm, “Following the settlement with FTX in March 2024 that allowed BlockFi to receive $874.5 million in claims against FTX and FTX affiliate Alameda Research, the Plan Administrator began planning for subsequent distributions to BlockFi customers based on anticipated FTX distributions.” It further stated, “An important feature of the FTX Settlement was that the Plan Administrator would have the option to monetize the FTX Claims through a sale of the FTX Claims to a third party.”

Meghji worked on finding a third party to buy the claims and was successful in June. BlockFi’s claims were sold at a premium in a manner that let it “maximize customer returns, generate significant recoveries for subordinated creditors, and eliminate timing and execution risks.”

The sale process kicked off on June 24, concluding in a little over two weeks on July 10 with the highest bidder. BlockFi’s repayment will occur through a partnership with Coinbase. Those claiming it must adhere to the verification and KYC (know your customer) policies of their regions.

“This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi,” Meghji relayed. He added, “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.”

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