According to the list of BlockFi creditors, the United States Securities and Exchange Commission (SEC) holds the highest position with a settlement balance of $30 million, which was recorded in February 2022.
In an act of agreement, the United States Securities and Exchange Commission (SEC) has decided to delay the payment of a $30-million penalty imposed on the now-bankrupt cryptocurrency lender, BlockFi, until all of its creditors are fully reimbursed. This sum constitutes the remaining balance of a $50-million settlement that was reached between the SEC and BlockFi in February of 2022.
As per the court filings dated June 22, it has been reported that the Securities and Exchange Commission (SEC) has decided to waive the outstanding amount owed by BlockFi. The reason behind this decision is to expedite the distribution of funds to investors without any unnecessary delays until all other legitimate claims have been fully settled. The official document also mentions that the SEC has consented to abstain from receiving any distributions under the Plan, or from demanding any cash reserve in relation to such distributions.
In February of 2022, the Securities and Exchange Commission (SEC) made public their actions against the cryptocurrency lending firm for their noncompliance in registering their high-yield interest accounts as securities. As a result of the settlement, BlockFi has agreed to pay a sum of $50 million to the regulator, as well as an additional $50 million to 32 U.S. states who have raised similar concerns.
As per the court records, the Securities and Exchange Commission (SEC) and West Realm Shires Services Inc. (operating as FTX US) were listed as the top creditors of BlockFi. The company filed for Chapter 11 bankruptcy protection towards the end of November, following concerns over its financial stability in the aftermath of the FTX crisis. As per the bankruptcy filing, BlockFi had liquidity of $256.9 million at the time of filing.
On May 11th, a federal judge authorized BlockFi to reimburse its customers who had deposited funds in its Wallet program with a sum of $297 million. It should be noted that the refund does not extend to users of BlockFi Interest Accounts (BIA) that were utilized in its lending operations and are currently under the ownership of the bankruptcy estates. It is worth noting that BlockFi’s BIA accounts currently hold more than $375 million.
Furthermore, BlockFi has committed to reimbursing its California-based customers with an amount exceeding $100,000. This compensation is intended for those who persisted in repaying loans even after the company ceased trading on November 10th of last year. A probe conducted by the Department of Financial Protection and Innovation in California revealed that at least 111 borrowers in the state had made loan repayments amounting to approximately $103,471 subsequent to the bankruptcy declaration.
#SEC #BlockFi #Bankruptcy
