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The US Securities and Exchange Commission (SEC) agrees to waive BlockFi's $30 million penalty until investors repay their money
The US Securities and Exchange Commission (SEC) has given up its place as one of the first creditors repaid by insolvent crypto lending platform BlockFi. The move comes as the SEC faces intense pressure due to a lawsuit against cryptocurrency exchange Binance. US Securities and Exchange Commission loses front-row seat to investors Early last year, BlockFi agreed to a $100 million settlement imposed by the US Securities and Exchange Commission for failing to register its crypto lending products with the agency. However, in November, BlockFi filed for Chapter 11 bankruptcy protection after crypto derivatives exchange FTX collapsed. The …
The US Securities and Exchange Commission (SEC) agrees to waive BlockFi's $30 million penalty until investors repay their money
The US Securities and Exchange Commission (SEC) has given up its place as one of the first creditors repaid by insolvent crypto lending platform BlockFi.
The move comes as the SEC faces intense pressure due to a lawsuit against cryptocurrency exchange Binance.
The U.S. Securities and Exchange Commission is losing a front-row seat for investors
Early last year, BlockFi agreed to a $100 million settlement imposed by the U.S. Securities and Exchange Commission for failing to register its crypto lending products with the agency.
However, in November, BlockFi filed for Chapter 11 bankruptcy protection after crypto derivatives exchange FTX collapsed. The platform had between $1 billion and $10 billion worth of user funds at the time of its bankruptcy. As a result, the lending platform failed to pay its $30 million settlement to the SEC.
During BlockFi's bankruptcy filing, the securities regulator was mentioned as one of the first creditors the company had satisfied following its restructuring process.
But the SEC has lost its front-row seat as one of the lender's early creditors, according to a court filing Thursday. The regulator said its claims should be classified as “general unsecured claims” under the ongoing bankruptcy process.
BlockFi’s reimbursement strategy
Last week, the troubled crypto lending company reached out to its customers regarding recovering their assets. The company noted that it will add new features to the BlockFi wallet before users can start making withdrawals.
The crypto lender added that the withdrawal process would be streamlined by enabling withdrawal batches for eligible users. To facilitate the withdrawal process, third-party wallets are required. BlockFi also announced that the withdrawal process is scheduled for this summer.
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