Hassan Maishera
TLDR;
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BlockFi will refund more than $100 to California clients, a few months after the crypto lender went bankrupt.
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BlockFi collapsed in November 2022 following its exposure to the now-defund FTX exchange.
BlockFi To Refund California Clients
The Department of Financial Protection and Innovation (DFPI) announced on Monday that bankrupt crypto lender, BlockFi, has approved a request to refund $103,471 via its servicer to its California clients.
This latest development comes after the DFPI’s investigation revealed that BlockFi failed to provide timely notification to borrowers that they could stop repaying their loans after the platform halted withdrawals. BlockFi’s failure to notify borrowers saw California borrowers remit at least $103,471 worth of loan repayments to the lender's servicer. The DFPI wrote;
“The DFPI investigation uncovered that the company failed to provide timely notification to borrowers that they could stop repaying on their BlockFi loans. This resulted in California borrowers remitting at least $103,471 in loan repayments to BlockFi’s servicer while they were unable to withdraw funds and collateral from BlockFi’s platform. BlockFi recently filed a motion in the bankruptcy court, requesting permission to direct its servicer to return these loan repayments. The hearing is scheduled for April 19, 2023.”
BlockFi was one of the cryptocurrency companies that went bankrupt following the collapse of the FTX exchange last year. The cryptocurrency lender halted withdrawals and deposits to wallets and interest accounts on Nov. 11, 2022, and filed for Chapter 11 bankruptcy protection two weeks later.
