BlockFi to shut web platform this month, will let users access funds via Coinbase

Centralized lender BlockFi announced that eligible BlockFi clients will be able to access crypto withdrawals via Coinbase after the firm shuts down its web platform.

This engagement with Coinbase ensures continuity in crypto withdrawals for those holding BlockFi accounts following the closure of the initial withdrawal window for eligible estate funds on the platform.

"BlockFi is pleased to announce that we have engaged Coinbase as our distribution partner to ensure continuity of crypto withdrawals available to our eligible BlockFi Interest Account (BIA), Retail Loan, and Private Clients," the firm stated.

The BlockFi web platform will shut down this month, it added.

The firm clarified that clients who missed the April 28 deadline for withdrawals and the May 10 deadline for verification via the BlockFi platform can still access their assets by creating or using an approved Coinbase account.

This means these clients won’t have their assets immediately converted to cash. Instead, they will be able to withdraw their crypto if they have an approved Coinbase account.

However, if a client is eligible to withdraw crypto but missed the deadline and does not have a verified Coinbase account, their assets will be converted to cash and distributed, according to the plan.

The plan administrator for BlockFi will continue to use Coinbase for future distributions — including any recoveries from FTX, the firm added.

Notably, BlockFi had reached an $875 million in-principle settlement with the FTX and Alameda Research estates.

How we got here

BlockFi first paused customer withdrawals in November 2022 and subsequently filed for Chapter 11 bankruptcy protection soon after. In September 2023, the bankruptcy court approved BlockFi’s Chapter 11 plan to pay back its 10,000 creditors.

As a centralized lender, BlockFi offered interest-yielding deposit accounts; however, it operated like a bank, loaning out user deposits to crypto clients.

The centralized lending sector suffered huge setbacks following a tumultuous year for centralized crypto lending services in 2022 — a period that saw the bankruptcy of several firms like Celsius, Voyager Digital, and Genesis, following the impact of the collapse of players such as Terra, FTX, and Three Arrows.