BlockFi completed its asset distribution process to creditors

In 2025, the cryptocurrency lending platform BlockFi completed a crucial phase of its recovery after the 2022 bankruptcy: the return of funds to its former clients. Although the company set May 15 as the deadline for creditors to file their claims, the results showed significant disparities depending on users’ geographic location, revealing operational challenges in international markets.

Unequal Results: Participation by Region

The numbers reflect a considerable gap in client participation based on their location. In the United States, 97% of clients completed the rights acknowledgment process, demonstrating widespread adoption of the refund system. However, the landscape changed dramatically in international markets: only 43% of non-U.S. users completed the necessary procedures to receive their funds.

This difference was not accidental. The process in the U.S. market began earlier than in international territories, thanks to additional judicial procedures required in both the United States and Bermuda, which caused administrative delays and procedural complexity.

Obstacles That Hampered International Users

BlockFi identified a potential reason for the low participation abroad: many clients considered messages from BlockFi Estate—where they were asked to select a payment method—as spam or potential identity theft attempts. This trust issue led the company to collaborate with digital security specialists to ensure the authenticity of its communications.

Additionally, the identity verification process “Know Your Customer” (KYC) posed an extra barrier, although BlockFi assured that the process was relatively simple: it required two identification documents and took approximately ten minutes. Once approved, funds were transferred within a maximum of 45 days.

The Origin of the Crisis: The FTX Cascade Effect

The need for this distribution stemmed from the collapse of FTX in 2022. BlockFi declared insolvency that same November, contagioned by the broader ecosystem’s debacle. However, the company managed to emerge from the restructuring process and announced in July 2024 an ambitious plan: to return 100% of the dollar value of all claims clients had at the time of bankruptcy.

Final Distribution and Redistribution of Funds

According to the insolvency code, unclaimed assets before the deadline were redistributed among other unsecured creditors who were in lower positions in the payment hierarchy. This legal mechanism ensured that no funds remained unallocated, channeling resources toward other rights holders in the process.

BlockFi used Coinbase as the distribution platform for U.S. clients, streamlining transfers toward the end of 2024 and early 2025. The completion of this cycle marks an important milestone in the recovery of the cryptocurrency lender, demonstrating that even after a significant bankruptcy, it is possible to return capital to those affected.