BlockFi

California permanently cuts off BlockFi’s license over bad lending practices

Published

2 months ago

November 9, 2024

The California Department of Financial Protection and Innovation has permanently revoked BlockFi’s lending license following its bankruptcy and regulatory issues.

BlockFi, a crypto lending platform, collapsed in 2022 amid financial troubles tied to the downfall of crypto exchange FTX.

Today, we’re announcing we’ve revoked crypto lender BlockFi’s California Financing Law (CFL) license. BlockFi has agreed to a settlement that includes a revocation of its license and a cease-and-desist from harmful practices. More: https://t.co/gdi28TpY7H pic.twitter.com/S1uieLHbkP
— CA Department of Financial Protection & Innovation (@CaliforniaDFPI) November 8, 2024

BlockFi had extended a $400 million credit line to FTX, and FTX’s bankruptcy had ripple effects, contributing to BlockFi’s financial instability and eventual bankruptcy filing.

BlockFi’s rocky past

The DFPI’s revocation of BlockFi’s license stems from findings that the lender breached California’s Financing Law by failing to assess borrowers’ ability to repay and charging interest before loans were issued, according to a now-deleted DFPI press release.

BlockFi also did not provide required credit counseling and inaccurately disclosed loan terms, impacting borrowers’ credit scores and ability to access future loans.

In addition to the revocation, BlockFi reached a settlement with the DFPI, agreeing to stop unsafe practices. The regulator imposed a $175,000 fine, waiving the payment to focus on creditor repayments, per the release.

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BlockFi

Bankrupt crypto lender BlockFi to start creditor repayments in July

Published

5 months ago

July 18, 2024

admin

Defunct cryptocurrency lending platform BlockFi is set to start repaying its creditors in July, 19 months after filing for bankruptcy.

Collapsed crypto lending platform BlockFi will start repaying its creditors in July, nearly two years after the firm filed for bankruptcy amid the dramatic collapse of the FTX crypto exchange.

In an X post on Thursday, the New Jersey-headquartered firm said the distributions will be processed “in batches in the coming months” via Coinbase, adding that eligible clients will receive a notification to the BlockFi account email on file. However, it clarified that non-U.S. clients remain unable to receive funds due to regulatory requirements, with no specified timeline for these repayments.

The distributions will be processed in batches in the coming months, and eligible clients will receive a notification to the BlockFi account email on file. Please note that non-US Clients are unable to receive funds at this time due to the regulatory requirements applicable to…
— BlockFi (@BlockFi) July 17, 2024

For those who are unable to open a Coinbase account, BlockFi earlier assured that all distributions “will be made in cash.”

In March, BlockFi announced it is unlikely to fully repay customers with interest-bearing accounts. The company had previously estimated that these customers might recover between 39.4% and 100% of their account value. The crypto lending giant filed for Chapter 11 protection in November amid market volatility and substantial exposure to the defunct crypto exchange FTX. Less than a year later, BlockFi emerged from bankruptcy and is now working on repaying its creditors.

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