The US Securities and Exchange Commission (SEC) has waived its priority in pursuing a $30 million fine against BlockFi, and proposed that the payment should be transferred into the category of “general unsecured claims” in order to maximize the return for investors.
The agency still retains all rights regarding the additional $50 million owed from the February 2022 settlement.
BlockFi initially entered Chapter 11 bankruptcy in November with over 100,000 creditors making claims totaling over $1 billion; the company estimated its available assets at $256.9 million.
Hodder Law founder Sasha Hodder has explained that BlockFi clients are at the bottom of the repayment list. In May, the court granted BlockFi’s request to return ~$300 million to customers held in custodial accounts.
After an unsuccessful attempt to sell the platform, management announced the planned liquidation, though user funds have not yet been released.
BlockFi hopes to be able to withdraw user funds before the end of the summer.
