BlockFi can take a deep breath as SEC gives it more time to repay a jaw-dropping fine.
The US Securities and Exchange Commission (SEC), a US government oversight agency responsible for regulating the securities markets, has agreed to delay a $30 million fine issued to a cryptocurrency lending platform BlockFi.
The court documents, dated June 22nd, reveal the SEC's willingness to hold back on collecting the rest of the $50 million fine.
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The decision aims to maximize the distribution of investors' funds and circumvent any potential delay in settling "all other Allowed Claims." In the announcement, the agency stated:
The Commission has agreed to forego participating in any distributions under the Plan or requiring any cash reserve in connection with such distributions.
A year ago, in February 2022, the SEC took action against BlockFi, accusing the crypto lending enterprise of failing to register its high-yield interest accounts as securities. Thus, as part of the settlement, BlockFi committed to pay $50 million to the SEC.
It is worth noting that late in November 2022, BlockFi sought Chapter 11 bankruptcy protection after its financial stability was questioned in the wake of the FTX crisis. The bankruptcy filing revealed BlockFi's liquidity stood at a staggering $256.9 million.
To provide relief to its customers, BlockFi was granted permission by a federal judge on May 11th to return $297 million to its Wallet program depositors.
Furthermore, an additional refund exceeding $100,000 is set to be issued by BlockFi to its California customers. These individuals made loan repayments after the company ceased trading on November 10th.
In light of these events, the financial pressures facing BlockFi serve as a poignant reminder of the regulatory complexities and risks inherent in the evolving cryptocurrency landscape. These developments highlight the importance of prudent business practices and strict adherence to regulatory norms for the sustainable growth of the industry.
