The California Department of Financial Protection and Innovation has permanently revoked BlockFi’s lending license following its bankruptcy and regulatory issues.
BlockFi, a crypto lending platform, collapsed in 2022 amid financial troubles tied to the downfall of crypto exchange FTX.
Today, we’re announcing we’ve revoked crypto lender BlockFi’s California Financing Law (CFL) license. BlockFi has agreed to a settlement that includes a revocation of its license and a cease-and-desist from harmful practices. More: https://t.co/gdi28TpY7H pic.twitter.com/S1uieLHbkP
— CA Department of Financial Protection & Innovation (@CaliforniaDFPI) November 8, 2024
BlockFi had extended a $400 million credit line to FTX, and FTX’s bankruptcy had ripple effects, contributing to BlockFi’s financial instability and eventual bankruptcy filing.
You might also like: FTX sues Crypto.com to recover millions linked to Alameda Research
BlockFi’s rocky past
The DFPI’s revocation of BlockFi’s license stems from findings that the lender breached California’s Financing Law by failing to assess borrowers’ ability to repay and charging interest before loans were issued, according to a now-deleted DFPI press release.
BlockFi also did not provide required credit counseling and inaccurately disclosed loan terms, impacting borrowers’ credit scores and ability to access future loans.
In addition to the revocation, BlockFi reached a settlement with the DFPI, agreeing to stop unsafe practices. The regulator imposed a $175,000 fine, waiving the payment to focus on creditor repayments, per the release.
You might also like: Crypto podcaster Cobie burns 60% of SOL meme ‘UPONLY’