BlockFi, a crypto lending company, announced the successful sale of its FTX claims, a significant step towards finalizing its bankruptcy process. This transaction allows the distribution of funds to creditors, with the sale completed at a premium to their face value, ensuring a near-term final distribution of 100% to all allowed customers and general unsecured creditors.

Mohsin Y. Meghji, BlockFi’s plan administrator, confirmed the transaction in a report to the United States Bankruptcy Court for the District of New Jersey. He stated this outcome is the best possible for BlockFi’s customers, surpassing initial expectations when the bankruptcy cases were filed in November 2022. Meghji highlighted the tireless efforts of various parties and announced plans to begin the final customer distribution as soon as reasonably practicable​.

In March 2024, BlockFi settled with FTX and Alameda Research, receiving $874.5 million in claims against them. This settlement was crucial, allowing subsequent distributions to BlockFi customers based on anticipated FTX distributions. The settlement included an option for the plan administrator to monetize the FTX claims through a third-party sale, which has now been realized.

BlockFi’s platform is no longer active, with any "in-kind" distributions facilitated through Coinbase. Users have received notifications from Coinbase about the successful matching of their identifying information with BlockFi’s data. While many customers view these developments positively, some remain skeptical, awaiting the actual deposit of funds into their Coinbase accounts.

In June, the plan administrator determined that a sale of the FTX claims at a level that maximized customer returns was feasible. The sale process, starting on June 24, 2024, concluded on July 10, 2024, with the highest and best bid acceptance. The purchase price exceeded the face value of the FTX claims, providing substantial value to BlockFi and its creditors.

The successful sale of FTX claims and the anticipated final distribution mark significant milestones in BlockFi's efforts to resolve its bankruptcy and repay its creditors. The settlement and subsequent monetization of FTX claims represent a notable recovery effort in the complex landscape of crypto bankruptcies​.