The U.S. Securities and Exchange Commission (SEC) has agreed to delay a $30 million fine from bankrupt crypto lender BlockFi until investors are repaid, according to a court filing from Thursday. The fine was part of a $50 million penalty owed to the SEC by BlockFi for failing to register with the regulator for the offering and sale of its crypto lending product. The platform had agreed to the settlement in February 2022, but filed for bankruptcy in November following the collapse of crypto exchange FTX.
The SEC agreed to postpone the payment in order to maximize the amount that may be distributed to investors and avoid delay in such distribution, according to the agreement reached on June 22. Sasha Hodder, founder of Hodder Law, a firm that specializes in crypto law, said in November that customers were at the bottom of the list for repayment.
In May, a New Jersey bankruptcy court judge said BlockFi customers can be repaid $300 million in funds held in custodial wallets on the platform. BlockFi has said $1 billion in claims against fallen crypto enterprise FTX and its sister trading firm Alameda will be the largest driver of fund recoveries for customers and creditors.