The California Department of Financial Protection and Innovation (DFPI) has revoked Blockfi Lending LLC’s finance lending license for violations under California’s Financing Law (CFL). Blockfi agreed to the revocation and to halt certain practices deemed harmful, following an examination that revealed the company failed to assess borrowers’ repayment ability, charged interest before disbursement, neglected to offer credit counseling, did not report payment data to credit bureaus, and inaccurately disclosed annual percentage rates (APRs). The license revocation follows a prior suspension in 2022, after Blockfi filed for bankruptcy following FTX’s collapse. Although Blockfi’s bankruptcy plan administrator claims enough assets have been recovered to repay customers, DFPI Commissioner Clothilde V. Hewlett emphasized the importance of consumer protection compliance for financial companies in California. As part of the settlement, Blockfi received a $175,000 fine, though payment was waived due to the company’s bankruptcy status and halted operations.
