BlockFi Plan Administrator Announces Claims Sale and Full Customer Recovery

Plan Administrator Seeks Final Distribution to Make Customers and Unsecured Creditors Whole; Sale Signifies Near End of BlockFi Wind-Down

NEW YORK, July 22, 2024 /PRNewswire/ -- Mohsin Y. Meghji, Plan Administrator of BlockFi Inc. and Managing Partner of M3 Partners, today filed a report to the United States Bankruptcy Court for the District of New Jersey announcing the closing of a significant transaction that monetizes all claims against FTX at a substantial premium to their face value and enables a near-term final distribution of 100% by the Plan Administrator on all allowed customer and general unsecured creditor claims.

"This transaction marks a final chapter in the wind-down and is the best possible outcome for customers of BlockFi," Meghji said. "These recoveries on customer claims, and the timeline those recoveries will be distributed on, were unimaginable when these cases were filed in November 2022. These results, achieved through tireless efforts by various parties, are remarkable. We intend to commence the Final Customer Distribution as quickly as reasonably practicable," Meghji concluded.

Following the settlement with FTX in March 2024 that allowed BlockFi to receive $874.5 million in claims against FTX and FTX affiliate Alameda Research, the Plan Administrator began planning for subsequent distributions to BlockFi customers based on anticipated FTX distributions. An important feature of the FTX Settlement was that the Plan Administrator would have the option to monetize the FTX Claims through a sale of the FTX Claims to a third party.  

In June 2024, the Plan Administrator determined that a sale at a level sufficient to maximize customer returns, generate significant recoveries for subordinated creditors, and eliminate timing and execution risks to the BlockFi estates with respect to their FTX Claims was possible. The Plan Administrator then launched a sale process that began on June 24, 2024, and closed on July 10, 2024 after the highest and best bid was determined. The purchase price was a substantial premium to the face value of the FTX Claims. 

BlockFi's platform is no longer active and any "in-kind" distributions will be available only through the Plan Administrator's partnership with Coinbase. Distributions to BlockFi International creditors, in particular, may require additional identify verification and "Know Your Customer" diligence in compliance with international standards. 

The Plan Administrator is represented by Brown Rudnick LLP, Genova Burns LLC, and Haynes Boone LLP, and is advised by M3 Partners as the Plan Administrator's financial advisor. A full report has been submitted to the Court.

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SOURCE BlockFi