In a recent court filing on Thursday, it was revealed that the United States Securities and Exchange Commission (SEC) has made a decision to postpone a $30 million fine that was supposed to be imposed on BlockFi, a bankrupt cryptocurrency lender.
The fine was originally part of a larger $50 million penalty that BlockFi owed to the Securities and Exchange Commission (SEC) for violating regulations related to the offering and sale of its crypto lending products. This settlement was agreed upon in February, but BlockFi filed for bankruptcy in November after the collapse of FTX, formerly one of the largest cryptocurrency exchanges.
During the ongoing Chapter 11 bankruptcy process, the SEC argued that its claims should be considered “general unsecured claims.” However, in order to prioritize the repayment of investors and avoid any delays in distributing funds to them, the SEC agreed to forge the $30 million payment. This agreement was reached on June 22.
According to Sasha Hodder, founder of Hodder Law and an expert in crypto law, it is likely that the SEC is one of the primary creditors seeking payment from BlockFi. Hodder noted that customers of BlockFi are at the lower end of the priority list when it comes to receiving funds.
In a ruling made by a New Jersey bankruptcy court judge in May, it was stated that Blockfi customers could potentially receive $300 million in funds that were held in the custodial wallets on the platform. Currently, the bankrupt estate has submitted a reorganization plan to the court, which is scheduled for a hearing in July.
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