The BlockFi bankruptcy distributions are paying most eligible customers 100% of the dollar value of their claims as of November 28, 2022, the day BlockFi filed for Chapter 11. Payments are processed through Kroll and Digital Disbursements, and any funds not claimed by the May 15, 2025 deadline may be redistributed to other creditors. If you had a Wallet account, a BlockFi Interest Account (BIA), or a smaller Convenience Class claim, the amount you get, the form it takes, and the steps you need to complete are not the same.
What You Get Back and How It’s Valued
Recoveries are paid in U.S. dollars, or Canadian dollars for Canadian customers, not in cryptocurrency. The figure is the “petition-date value” of your holdings: the dollar price of your crypto on November 28, 2022. That is not the price when you deposited, and not the price on the day you’re paid. If the market moved between the filing date and today, your recovery reflects only the filing-day snapshot.
General unsecured creditors, which includes BIA holders, are entitled to 100% of that petition-date dollar value. Customers placed in the Convenience Class, reserved for smaller claims, received a one-time payment of 50% of their allowed claim value, with those distributions beginning in February 2024. The reason full recovery is even possible is BlockFi’s claim against the FTX estate: a settlement valued at up to $874.5 million was reached in March 2024, and BlockFi later sold its FTX claims at a substantial premium to face value, generating enough cash to fund distributions.
Why Wallet and BIA Accounts Were Treated Differently
Whether your crypto was ever really “yours” during the bankruptcy came down to which account you used. Wallet accounts operated as a storage service, with BlockFi holding the crypto on the customer’s behalf. BIAs worked as a lending arrangement: you deposited crypto, earned interest, and, in the words of the account terms, gave “title and control over the tokens to BlockFi for use in BlockFi’s revenue-generating activities.”1GovInfo. Court Opinion in In re BlockFi Inc. et al.
In May 2023, Bankruptcy Judge Michael Kaplan ruled that Wallet crypto remained customer property and was not part of BlockFi’s bankruptcy estate. BIA balances belonged to BlockFi, and BIA holders were classified as general unsecured creditors.1GovInfo. Court Opinion in In re BlockFi Inc. et al. Wallet holders had a window to withdraw their crypto in-kind through the BlockFi app, which closed on December 31, 2023. Anyone who missed that window or had identity verification problems became eligible for a cash distribution instead.2Kroll Restructuring Administration. BlockFi Distributions
How Payments Are Sent
Distributions are handled by Kroll, the court-appointed claims agent, together with Digital Disbursements, a third-party payment processor.2Kroll Restructuring Administration. BlockFi Distributions Customers were asked during a selection window to choose a preferred payment method. If no choice was made, the default was Zelle for U.S.-based customers and PayPal for international customers.
One detail on Zelle matters: unclaimed Zelle payments revert to the BlockFi estate just 14 days after issuance. If you were expecting a Zelle transfer and ignored the notification, the money may already have been sent back.2Kroll Restructuring Administration. BlockFi Distributions
Deadlines and How to Claim
The Plan of Reorganization was confirmed on October 3, 2023 and became effective on October 24, 2023, at which point a Plan Administrator took over the wind-down and distribution work.3Kroll Restructuring Administration. BlockFi Inc. Case Information
As of April 2025, 97% of U.S. customers had claimed their distributions. Only 43% of international customers had. The Plan Administrator asked remaining customers to complete identity verification and claim their assets by May 15, 2025. Under the bankruptcy code, assets not claimed by that deadline could be redistributed to other unsecured creditors lower in the priority order.
The identity verification process requires two forms of ID and takes about ten minutes. Once approved, payments were expected to arrive within 45 days. If you missed the deadline, check the Kroll distributions page for any remaining remedies, though the options at this stage may be very limited.2Kroll Restructuring Administration. BlockFi Distributions
How to Report the Distribution on Your Taxes
The IRS Taxpayer Advocate Service has addressed digital-asset bankruptcies directly: you cannot claim a tax loss on crypto that is merely frozen or tied up in proceedings. A loss becomes deductible only when there is a “closed and completed transaction.”4IRS Taxpayer Advocate Service. When Can You Deduct Digital Asset Investment Losses
If you received a distribution from the BlockFi estate, even a partial one, the IRS treats it as a sale. You calculate your capital gain or loss by comparing what you received against your original cost basis in the crypto, then report the result on Form 8949 and Schedule D of your Form 1040 for the year you received the distribution.4IRS Taxpayer Advocate Service. When Can You Deduct Digital Asset Investment Losses If you received nothing at all, your crypto investment may be treated as worthless, and different rules apply. Given how petition-date valuations, cost basis, and distribution timing interact, a tax professional familiar with digital assets is worth the call.
If You Withdrew Money Right Before the Filing
Bankruptcy estates can recover certain payments made to creditors shortly before filing. For BlockFi, customers who withdrew more than roughly $7,575 from the platform within the 90 days before the November 28, 2022 filing could face “preference actions” demanding the money back. The same applied to customers who moved that amount from a BIA into a Wallet account during the same window.
BlockFi’s liquidation analysis estimated these potentially recoverable transfers totaled about $230 million. The confirmed plan addressed preference exposure as part of the overall distribution structure. If you received a preference demand letter, individual circumstances vary widely and a bankruptcy attorney can review whether defenses apply.
Avoiding Distribution Scams
Phishing has been a constant problem throughout this case. In August 2023, attackers breached Kroll’s systems and stole personal information belonging to BlockFi, FTX, and Genesis bankruptcy claimants. That stolen data has fueled targeted phishing campaigns ever since.
Legitimate communications come from a limited set of domains: blockfi.com, ra.kroll.com, and digitaldisbursements.com. Any message asking you to click a link to claim funds, verify identity through an unfamiliar portal, or hand over a seed phrase or wallet credentials is a scam. Rather than clicking links in emails, go directly to cases.ra.kroll.com/BlockFiDistributions and log in from there.2Kroll Restructuring Administration. BlockFi Distributions Check sender domains carefully; scam addresses often add characters or use small misspellings that look right at a glance.