The California Department of Financial Protection and Innovation (DFPI) has permanently revoked BlockFi’s lending license due to regulatory violations, prioritizing consumer recovery over penalties.
This decision, announced on November 7, follows an investigation that revealed BlockFi’s unsafe practices, including inadequate borrower assessments and failure to disclose loan terms accurately.
Although BlockFi faced a $175,000 fine, DFPI waived it in light of the company’s bankruptcy. BlockFi, which shut down its platform in May, had significant exposure to FTX’s collapse, leading to over $10 billion in debt and affecting 100,000 creditors.
BlockFi recently secured up to $874 million in potential repayments through a settlement with the FTX estate.
In February 2022, the California Department of Financial Protection and Innovation (DFPI) reached a consent order with BlockFi to address allegations that the company had offered and sold unqualified, non-exempt securities.
The DFPI emphasizes that all entities offering securities, lenders, and financial services providers operating in California must comply with state financial laws.
Image Credit: Pixabay
Keep in mind that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. We try our best to keep things fair and balanced, in order to help you make the best choice for you.
