Crypto lender BlockFi has agreed to refund over $100,000 to its California-based customers who continued repaying their loans despite a trading halt that took place on November 10th last year. This move comes after an investigation by the state's financial watchdog, Department of Financial Protection and Innovation (DFPI), which revealed that BlockFi failed to notify borrowers about the option to stop making payments until November 22nd.
According to DFPI Commissioner Manuel P. Alvarez, "Californians must be able to trust their financial service providers." He added that BlockFi's failure "jeopardized consumers' rights under California law."
BlockFi is one of the largest crypto lending platforms in the world and provides loans backed by cryptocurrencies such as Bitcoin and Ethereum. The company halted trading for several hours on November 10th due to technical difficulties.
In response, BlockFi CEO Zac Prince said in a statement: "We take our regulatory obligations seriously and are committed to complying with all applicable laws." He added that while they disagree with DFPI's findings, they have agreed on a resolution regarding this matter.
The refunds will cover all interest paid by affected customers between November 10th and November 22nd last year. The company will also provide an additional payment equaling five percent of each loan balance during this period.
This settlement marks another significant development in the regulation of digital assets as more authorities work towards ensuring proper conduct within the industry.