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The DFPI’s court filing stated, “The Commissioner finds that BlockFi did not timely notify BlockFi borrowers of the status of their BlockFi Loans, including the terms of repayment.”
The Department of Financial Protection and Innovation (DFPI) announced that bankrupt lender BlockFi will refund $100K worth of crypto assets to its California-based clients.
In November 2022, the DFPI launched an investigation into BlockFi shortly after the latter suspended withdrawals following FTX’s collapse.
In a recent press release, the DFPI said its probe into BlockFi revealed that the lender failed to inform borrowers that they could stop repaying their outstanding loans.
Consequently, BlockFi’s clients continued to repay their loans while they were unable to liquidate their collateral or withdraw their assets from its platform. The regulator added that the loan remittance from its Californian users alone amounted to over $103,000.
As a result, BlockFi will refund the amount paid by its Californian clients. The court hearing for this decision is scheduled for April 19, 2023.
The DFPI also stated that the bankrupt lender has accepted an interim suspension of the CFL license. BlockFi has also agreed to set the interest rates on loans to 0% and will drop fees associated with late loan repayments. Moreover, the firm will provide a monthly report detailing the amount it collected to the DFPI Commissioner, Clothilde Hewlett.