BlockFi, a bitcoin loan platform, has agreed to reimburse consumers in California who were impacted by the collapse of the company for more than $100,000.
The Terra catastrophe and the FTX breakdown last year generated tremendous instability for the hitherto dominant player in its industry. Due to its extensive exposure and strong ties to the exchange, it filed for bankruptcy protection again at the end of November.
According to the Department of Financial Protection and Innovation (DFPI), BlockFi would compensate Californian customers who continued making loan payments while being unaware of the lender’s problems.
BlockFi Is Making Refunds
According to the research, such consumers gave their servicer at least $103,471 in 2022. They were also unable to remove money and security from the platform at the same time.
Recently, the servicer was asked by the crypto lender to refund those loan repayments. The next hearing in mid-April will provide further details about the situation. It was one of the many digital asset companies that suffered last year as a result of the bear market and unfavorable circumstances. The Terra collapse and the FTX failure exacerbated its core issues, which had started in May.
During the summer, the exchange came very close to acquiring BlockFi, while the latter had almost half of its assets linked to FTX Group. Given all of those problems, it is understandable why the lender requested Chapter 11 bankruptcy protection in the US at the end of November.
According to court records filed on Friday, the federal bankruptcy court overseeing the case of BlockFi has allowed the sale of approximately 6,400 mining rigs to the U.S. Agriculture & Mining Opportunities Fund for $4.7 million. In late November 2022, BlockFi filed bankruptcy in the U.S. Bankruptcy Court for the District of New Jersey, mostly as a result of the fallout from the demise of cryptocurrency exchange FTX. BlockFi ra