BlockFi to Reimburse Californians With Over $100,000

The cryptocurrency lending platform – BlockFi – agreed to provide more than $100,000 in refunds to Californian customers affected by the firm’s collapse.

The former giant in its field passed through severe turbulence last year caused by the Terra crash and the FTX meltdown. Its massive exposure and close relation with the exchange led to the consecutive filing for bankruptcy protection at the end of November.

• The Department of Financial Protection and Innovation (DFPI) announced that BlockFi will reimburse Californian users who were not notified about the lender’s issues and kept repaying their loans.
• The investigation discovered that such clients distributed at least $103,471 in 2022 to BlockFi’s servicer. At the same time, they were unable to withdraw funds and collateral from the platform.
• The crypto lender recently requested the servicer to return those loan repayments. A hearing scheduled for mid-April will shed more light on the case.
• BlockFi was among the numerous digital asset entities harmed by the bear market and the adverse events last year. Its main problems began in May (shortly after the Terra collapse) and intensified with the FTX failure.
• The exchange was close to purchasing BlockFi during the summer, while the latter had nearly half of its assets tied to FTX Group.
• Considering all those issues, it is no wonder that the lender filed for Chapter 11 bankruptcy protection in the United States towards the end of November.