The United States Securities and Exchange Commission (SEC) has postponed BlockFi’s $30 million payout, introducing new conditions.
The stipulation accompanying the decision to delay the payment requires BlockFi to fully repay the creditors’ claims before receiving its fine.
SEC Delays $30 Million BlockFi Payout, Sets Conditions
In a detailed examination of court documents, it was found that the SEC proposed transferring the due amount to the category of “general unsecured claims.” This move indicates a refusal to accept the fine as a priority payment.
Instead, the SEC chose to “maximize the amount of distribution among investors and avoid delay”.
The SEC’s approach to the BlockFi case has been firm and unyielding. The agency retains all rights regarding the BlockFi requirements, with a pending balance of $50 million due to the settlement of claims against the platform in February 2022.
Last November, BlockFi filed for insolvency under Chapter 11 of the US Bankruptcy Code.
Counted among the platform’s largest creditors, the SEC stands with over 100,000 creditors who collectively demand claims exceeding $1 billion. Meanwhile, BlockFi could only estimate its available assets to be around $256.9 million.
Despite the complexity of the situation, there has been some progress. In May 2023, the court permitted the company to return approximately $300 million in custodial accounts to customers.
The future, however, still holds uncertainty, with management reporting plans for liquidation after an unsuccessful sale transaction. Still, the company remains hopeful to resume the withdrawal of user funds by the end of summer.