How BlockFi Achieved Full Recovery for Customers: A Bankruptcy Success Story

• BlockFi completes FTX claims sale, ensuring 100% recovery for eligible customer and creditor claims.
• BlockFi partners with Coinbase for final in-kind distributions, enhancing customer recovery process.
• Hedge fund Diameter Capital profits from FTX claims, surpassing initial return expectations.

BlockFi, the defunct crypto lender, has achieved a major milestone in its bankruptcy proceedings by selling its FTX claims at a substantial premium. This sale paves the way for a full recovery of eligible customer and general unsecured creditor claims.

Mohsin Y. Meghji, BlockFi’s Plan Administrator and Managing Partner of M3 Partners, detailed the development in a report to the United States Bankruptcy Court for the District of New Jersey. The transaction, which closed on July 10, was executed at a premium to the face value of the FTX claims. This sale is expected to facilitate a near-term final distribution to BlockFi’s creditors.

In March 2024, BlockFi reached a settlement with FTX and Alameda Research, securing $874.5 million in claims against the bankrupt entities. The Plan Administrator initiated a sale process on June 24, culminating in the acceptance o…

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