SEC nixes $30M fine from BlockFi until bankrupt crypto lender repays investors

Bankrupt cryptocurrency lender BlockFi will not have to pay a $30M fine to the U.S. Securities and Exchange Commission until after its investors are repaid, according to a recent court filing. The payment is part of a $50M penalty that BlockFi owes to the Wall Street regulator for failing to register its crypto lending product. The platform was said to have agreed to settle the charges in February 2022 but it filed for Chapter 11 shortly after the meltdown of crypto exchange FTX ( FTT-USD ) in November. The SEC, nonetheless, agreed to forego the $30M payment "in order to maximize the amount that may be distributed to investors and avoid delay in such distribution," the filing from Thursday said . Fellow crypto lender Nexo reportedly offered to buy BlockFi for $850M in July of last year, but the latter turned down the offer and moved forward to be bailed out by FTX US. But FTX US also filed for Chapter 11, so the deal never went through. Without securing a rescue deal, BlockFi has been attempting to repay its creditors, getting the green light in January 2023 to sell its crypto mining assets in an effort to repay its creditors. More on Crypto and the SEC: SEC sues Coinbase for operating as unregistered broker Crypto prices suffer as SEC sues Binance and CEO Changpeng Zhao The SEC Is Suing Crypto Titans: Where Does This Leave Crypto? Uniswap: Beneficiary Of The SEC's Crypto War?