The California Division of Monetary Safety and Innovation has completely revoked BlockFi’s lending license following its chapter and regulatory points.
BlockFi, a crypto lending platform, collapsed in 2022 amid monetary troubles tied to the downfall of crypto trade FTX.
BlockFi had prolonged a $400 million credit score line to FTX, and FTX’s chapter had ripple results, contributing to BlockFi’s monetary instability and eventual chapter submitting.
BlockFi’s rocky previous
The DFPI’s revocation of BlockFi’s license stems from findings that the lender breached California’s Financing Legislation by failing to evaluate debtors’ skill to repay and charging curiosity earlier than loans have been issued, in keeping with a now-deleted DFPI press launch.
BlockFi additionally didn’t present required credit score counseling and inaccurately disclosed mortgage phrases, impacting debtors’ credit score scores and skill to entry future loans.
Along with the revocation, BlockFi reached a settlement with the DFPI, agreeing to cease unsafe practices. The regulator imposed a $175,000 nice, waiving the cost to deal with creditor repayments, per the discharge.
