As a seasoned financial analyst with extensive experience in the crypto industry, I’ve witnessed my fair share of ups and downs in this dynamic market. The recent news regarding BlockFi’s successful sale of its FTX claims is a noteworthy development that brings a glimmer of hope to the customers who have been waiting for repayment since the bankruptcy filing in 2022.
BlockFi, a crypto lending firm that filed for bankruptcy in 2022 after the failure of FTX exchange, reported on Monday the successful sale of its FTX-related claims. This development signifies progress in BlockFi’s bankruptcy proceedings, paving the way for distributing remaining funds to creditors.
Based on the announcement made on Monday, the sale of FTX claims was finished with a significant markup over their original value. The administrator explained that this premium aims to facilitate a swift distribution of 100% to eligible customers and unsecured creditors in the near future.
‘Best Possible Outcome For Customers’
I recently learned that BlockFi’s representative, Mohsin Y. Meghji, filed a report with the US Bankruptcy Court for the District of New Jersey. In this report, he confirmed the completion of a transaction that monetizes all claims against FTX.
According to Meghji’s perspective, this turn of events represents the most favorable resolution for BlockFi’s clients. He went so far as to express that it surpasses the initial predictions made when the bankruptcy proceedings were initiated in November 2022.
The outcomes we’ve reached after considerable work from different teams are truly impressive. We plan to initiate the Final Customer Delivery as soon as possible without compromising quality and safety.
According to Bitcoinist‘s report from March 2024, BlockFi reached a settlement with both FTX and Alameda Research, the bankrupt crypto exchange’s trading arm. As a result, BlockFi became eligible to receive approximately $874.5 million in outstanding claims against these entities.
The agreement opened up the path for potential payouts to BlockFi users, following expected distributions from FTX. A notable feature of this arrangement was the plan manager’s ability to sell the FTX claims to a third party.
BlockFi’s Platform Inactive, Repayment Progresses
Approximately a month ago, in June, it was decided by the plan administrator that selling the FTX Claims at a price that would yield the highest possible returns for customers and substantial recoveries for subordinated creditors was a viable option.
The selling process began on June 24, 2024, and ended on July 10, 2024, with the acceptance of the most advantageous bid. Notably, the transaction price surpassed the FTX Claims’ face value, generating significant worth for BlockFi and its debtors.
Based on my extensive experience in the financial technology industry and having closely followed the developments at BlockFi, I can tell you that recent updates have left users feeling uneasy. The news that BlockFi’s platform is no longer active and “in-kind” distributions will now be facilitated through Coinbase comes as a surprise to many. In the wake of this announcement, some users have reportedly received notifications from Coinbase indicating successful matching of their personal information with BlockFi’s data.
Despite the optimistic outlook brought about by advancements in the bankrupt crypto lender’s insolvency process, Bitcoinist noted on July 19 that while some customers welcomed the news of repayment as a positive development, others remained cautious and emphasized the importance of actually receiving their funds into their Coinbase accounts.
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2024-07-24 07:41