- The agency’s priority is investor payouts
- It was previously reported that BlockFi would begin paying customers in the summer
The Securities and Exchange Commission is waiving a $30 million fine for bankrupt cryptocurrency lender BlockFi. The purpose of this decision is to speed up payments to investors.
This $30 million is the result of a $50 million fine that BlockFi must pay to the Commission. The SEC previously accused the lender of unregistered activities of a platform for offering and selling its products. BlockFi agreed to be regulated last February, but filed for bankruptcy in November after the FTX collapse.
The agency wrote in a statement that $30 million should be counted as part of “general unsecured claims” in the current Chapter 11 bankruptcy proceeding. However, in order to maximize the amount that could be distributed to investors and avoid delaying such distribution, the regulator agreed to waive the payout.
Sasha Hodder, founder of the crypto-law firm Hodder Law, said the SEC was likely among the first in line to receive payouts from the lender. He also added, customers are a low priority in the queue to receive payments.
In May, a judge ruled that BlockFi customers could be refunded $300 million stored in their wallets on the platform. At the same time, the company presented a reorganization plan to the court, with a hearing scheduled for July. The lender also said the lawsuits against FTX and Alameda are key to recovering funds from customers and lenders.
The lender has also said that the lawsuits against FTX and Alameda are key to recovering funds from customers and lenders.