{"id":99173,"date":"2024-11-08T06:56:15","date_gmt":"2024-11-08T10:56:15","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=99173"},"modified":"2024-11-08T06:59:47","modified_gmt":"2024-11-08T10:59:47","slug":"california-revokes-blockfis-lending-license","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/california-revokes-blockfis-lending-license\/","title":{"rendered":"California Revokes BlockFi’s Lending License Two Years Post-Bankruptcy"},"content":{"rendered":"\n

Bankrupt and now defunct BlockFi<\/a> has entered into a settlement in which it has consented to the revocation of its license and to cease\u00a0unsafe practices.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The California Department of Financial Protection and Innovation (DFPI) has permanently revoked the license of BlockFi, a bankrupt cryptocurrency lender, two years after the company declared bankruptcy.<\/p>\n\n\n\n

On November 7, DFPI announced\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> that the license revocation followed an investigation by the agency, which initially suspended BlockFi\u2019s license in November 2022. <\/p>\n\n\n\n

BlockFi agreed to the revocation as part of a settlement that also required the company to stop any violations and to cease unsafe practices, according to DFPI.<\/p>\n\n\n\n

BlockFi\u2019s License Violations<\/h2>\n\n\n\n

After suspending BlockFi\u2019s license two years ago, the DFPI fully revoked it upon discovering that the company had violated the California Financing Law (CFL). <\/p>\n\n\n\n

DFPI found that BlockFi failed to assess borrowers\u2019 ability to repay, charged interest before loan proceeds were issued, did not offer credit counseling, and did not report payment history to credit bureaus. <\/p>\n\n\n\n

Additionally, the company inaccurately disclosed annual percentage rates in loan documentation.<\/p>\n\n\n\n

DFPI Commissioner Clothilde Hewlett stated:<\/p>\n\n\n\n

\n

\u201cWhile we encourage innovation in our financial marketplace, companies must comply with laws and protect consumers to continue operating in California.\u201d<\/p>\n<\/blockquote>\n\n\n\n

As part of the settlement, DFPI imposed a $175,000 fine on BlockFi for CFL violations. However, the fine was waived to focus on consumer repayments due to BlockFi\u2019s bankruptcy status and lack of operations.<\/p>\n\n\n\n

BlockFi\u2019s Web Platform Closure and Bankruptcy Developments<\/h2>\n\n\n\n

The license revocation in California follows BlockFi\u2019s termination of its web platform in May 2024, which left customers unable to access the platform. <\/p>\n\n\n\n

\"California
BlockFi\u2019s platform shutdown announcement in May 2024. Source: BlockFi<\/em><\/figcaption><\/figure>\n\n\n\n

Due to their significant financial ties, BlockFi\u2019s bankruptcy<\/a> troubles began after FTX\u2019s collapse in November 2022.<\/p>\n\n\n\n

In its Chapter 11 bankruptcy filing in November 2022, BlockFi disclosed it had substantial exposure to FTX, including a $400 million credit line extended to FTX US in July 2022. <\/p>\n\n\n\n

As reported by Bloomberg, FTX US owed BlockFi $275 million, making it one of BlockFi\u2019s largest unsecured creditors.<\/p>\n\n\n\n

In March 2024, BlockFi reached an $875 million settlement agreement with the estates of FTX and Alameda Research. The company began its first interim cryptocurrency distributions through Coinbase in July 2024.<\/p>\n\n\n\n

As of April 2023, BlockFi\u2019s liabilities were estimated to be between $10 billion and over 100,000 creditors.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bankrupt and now defunct BlockFi has entered into a settlement in which it has consented to the revocation of its license and to cease\u00a0unsafe practices. The California Department of Financial Protection and Innovation (DFPI) has permanently revoked the license of BlockFi, a bankrupt cryptocurrency lender, two years after the company declared bankruptcy. On November 7, […]<\/p>\n","protected":false},"author":56,"featured_media":99176,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[10893,152,4480,12424,1935,1502],"class_list":["post-99173","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bankruptcy","tag-bitcoin","tag-california","tag-lending","tag-policy","tag-regulation"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2024\/11\/California-Revokes-BlockFis-Lending-License-Two-Years-Post-Bankruptcy.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/99173","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=99173"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/99173\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/99176"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=99173"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=99173"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=99173"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}