The U.S. Securities and Exchange Commission (SEC) has agreed to defer the payment of a $30 million fine for BlockFi, a bankrupt crypto lender. The move aims to prioritize the reimbursement of creditors and maximize the amount that can be distributed to investors.
BlockFi is currently in the midst of bankruptcy proceedings following the collapse of FTX. The company still owes $30 million from a $50 million penalty imposed by the SEC in 2021. The penalty was related to charges of failing to register for the offering and sale of its lending products.
Initially, BlockFi proposed that the payment to the SEC should be delayed until other debts were settled. However, the SEC argued against this, insisting on simultaneous payments with other creditors. The recent court decision now allows the regulator to wait for its $30 million fine.
The decision is a positive development for BlockFi’s creditors and investors. It means that more of the company’s assets will be available to repay debts and distribute to investors.
In May, a judge in New Jersey ruled that BlockFi’s customers could retrieve $300 million held in custodial wallets on the platform. This ruling also provides some relief to customers who were affected by BlockFi’s bankruptcy.
BlockFi is currently working on a reorganization plan, which is set to be presented in court in July. The company believes that the return of funds to clients and creditors largely hinges on the success of its lawsuits against former commercial partners FTX and Alameda. These legal battles have the potential to impact over $1 billion in recoveries.
