• BlockFi, a bankrupt crypto lender, has agreed to provide refunds totaling over $100,000 to its California customers who continued to repay loans despite a trading suspension.
• The Department of Financial Protection and Innovation (DFPI) of California revealed that BlockFi had authorized the distribution of $103,471 in refunds through its servicer.
• BlockFi requested the bankruptcy court’s approval to return the payments to the borrowers in a motion filed on February 24th.
Overview
BlockFi, a bankrupt crypto lender, has agreed to provide refunds totaling over $100,000 to its California customers who continued to repay loans despite a trading suspension on November 10th of last year.
Amount Owed
The Department of Financial Protection and Innovation (DFPI) of California revealed on Monday that BlockFi had authorized the distribution of $103,471 in refunds through its servicer to its clients in California. According to the DFPI, 111 people in California paid this amount between November 11th and November 22nd.
Licensing Issues
In November, the DPFI commissioner suspended BlockFi’s lending license and revoked it a month later. The crypto lender has now agreed to comply with the relevant orders after failing to inform and update its customers promptly. Absence Of Relevant Notification Until November 22 The DFPI mentioned that borrowers were not informed by November 22 that they could stop repaying their BlockFi loans “until further notice.”
Refund Motion
BlockFi requested the bankruptcy court’s approval to return the payments to the borrowers in a motion filed on February 24th, per the documents. The refunds processed so far are just a fraction of the total amount the crypto lender is indebted to its lenders.
Debt Liability
BlockFi disclosed in its early bankruptcy filings that it has a liability between $1 billion and $10 billion. BlockFi is bound