The Great Loan Reversal
BlockFi, the crypto lender that’s become synonymous with drama lately, has agreed to refund over $100,000 to its customers in California. This comes after a rather confusing episode when borrowers continued to pay their loans during a trading halt that went into effect on November 10, 2022. Talk about being ghosted by your loan provider!
What Happened?
The California’s Department of Financial Protection and Innovation (DFPI) conducted an investigation and found that at least 111 borrowers had made approximately $103,471 in loan repayments between November 11 and November 22. These borrowers were in the dark, as BlockFi apparently dropped the ball on notifying them that they could stop repaying.
Delayed Notifications
To add salt to the wound, BlockFi sent out a notification only on November 22, a whopping 12 days after the trading halt, informing borrowers they could cease payments “until further notice.” Yikes! What’s even worse? The DFPI states that these folks just kept paying, thinking they had to. It’s like showing up to a party a week late and still expecting cake!
BlockFi’s Courtroom Gamble
In February, BlockFi filed a motion requesting permission from the bankruptcy court to return those payments. If the court decides to approve it, there could be shiny refunds heading their way. There’s a hearing set for April 19, and hopefully, it’ll all be wrapped up faster than you can say “crypto crash.”
What’s Next for BlockFi?
While the drama unfolds, BlockFi agreed to an interim suspension of its California Financing Law (CFL) license. This means they’re putting a pause on collecting repayments from California customers, which is sort of a relief. Or is it? Here’s hoping that the customers won’t be punished with late fees because BlockFi will not be charging any late fees or reporting these loans as delinquent. It’s a win for credit scores, at least!
Revolutionizing Borrower Rights?
With this movement by DFPI, it raises an important question: Are borrowers now more empowered? Should crypto lenders be held accountable for not keeping their clients in the loop? It looks like BlockFi is paving the path for potentially better communication within the ever-chaotic crypto space. But one thing’s for sure—if you’re in crypto, always stay on your toes!
