The California Department of Financial Protection and Innovation (DFPI) has fully revoked the license of the bankrupt crypto lender BlockFi nearly two years after the company declared bankruptcy.

This decision comes as the final step in an investigation that began with the DFPI’s suspension of BlockFi’s operations in November 2022.

California DFPI Revokes BlockFi’s License

As part of a settlement, BlockFi agreed to give up its license, halt its unlawful practices, and stop engaging in activities deemed unsafe. This arrangement formally ends BlockFi’s presence in California’s lending sector, reinforcing the DFPI’s focus on safeguarding consumer interests.

The DFPI determined that BlockFi broke state financial regulations by neglecting to evaluate borrowers’ capacity to repay their loans and charging interest before actually providing loan funds. Moreover, BlockFi did not offer essential credit counseling to borrowers and failed to report payment histories to credit agencies.

“While we encourage innovation in our financial marketplace, companies must comply with laws and protect consumers in accordance with those laws to continue doing business in California,” DFPI Commissioner Clothilde V. Hewlett said.

Regulators also found that BlockFi inaccurately presented loan interest rates in its documents. As a consequence, the DFPI initially issued a $175,000 penalty for violations but later waived it, prioritizing consumer reimbursement due to BlockFi’s bankruptcy status.

BlockFi’s financial troubles had intensified since November 2022, following the Go to Source to See Full Article
Author: Farah Ibrahim