Bankrupt Crypto Lender BlockFi to Refund More Than $100K to California Clients

The company will distribute the loan repayment refunds through its servicer to former clients, pending bankruptcy court approval. 

AccessTimeIconMar 27, 2023 at 8:40 p.m. UTC
Updated Mar 27, 2023 at 9:53 p.m. UTC

BlockFi has approved a request to distribute $103,471 in refunds through its servicer to its California clients, the state’s Department of Financial Protection and Innovation (DFPI) announced on Monday.

The decision, which is subject to a bankruptcy court’s approval, comes after a DFPI investigation found the now-bankrupt crypto lender “failed to provide timely notification” to borrowers that they could stop repaying their loans after the company had paused withdrawals on its platform. As a result, BlockFi’s California borrowers remitted at least $103,471 worth of loan repayments to the lender's servicer.

BlockFi froze client withdrawals and deposits to wallets and interest accounts on Nov. 11, 2022, following the collapse of crypto exchange FTX. The exposure to FTX eventually led to BlockFi’s filing for Chapter 11 bankruptcy protection two weeks later.

A hearing concerning the refund request will take place on April 19, according to the DFPI announcement.

Edited by Stephen Alpher.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Elizabeth Napolitano

Elizabeth Napolitano was a news reporter at CoinDesk.

Read more about