The SEC has reached an agreement to postpone the repayment of the $30 million fine imposed on BlockFi. The aim is to maximize the funds available for distribution to investors and prevent any delays in the reimbursement process.
BlockFi, a crypto lending platform, filed for bankruptcy following the collapse of FTX. While BlockFi had previously agreed to settle the $50 million penalty with the SEC, the bankruptcy raised questions about the timing of the repayment.
BlockFi initially proposed paying the fine after settling other outstanding debts. However, the SEC insisted on simultaneous repayment with other creditors. The recent court decision reflects a shift in the SEC’s stance, allowing the repayment to be postponed.
In May, a judge ruled that BlockFi’s customers could recover $300 million held in custodial wallets on the platform. This decision marked a significant step in the ongoing bankruptcy proceedings and provided some relief to affected customers.
BlockFi’s bankruptcy estate is currently formulating a reorganization plan, which is set to be presented in court in July.
The lender’s recovery of funds for clients and creditors largely depends on the outcome of its lawsuits against former commercial partners FTX and Alameda. These lawsuits have the potential to impact over $1 billion in recoveries.