Rather than accede to or accept the license withdrawal, the commission insisted that BlockFi go through administrative proceedings. The bankrupt crypto exchange was left with no choice but to sue Connecticut Banking Commissioner George Perez.
Blockfi’s efforts to return its Connecticut money transmitter license have been futile, as the state regulator has repeatedly refused to respond. Instead of acquiescing or accepting the license withdrawal, the commission insists that BlockFi go through administrative procedures that would require the bankrupt crypto exchange to undergo certain court proceedings or pay fines.
BlockFi filed for bankruptcy after last year ftx The crash, claiming outstanding debts to more than 100,000 creditors, accounts for a total of $1.3 billion owed to its 50 largest creditors. Filing for bankruptcy also means that the defunct crypto company will need to surrender its Connecticut money transmitter license, which allowed it to facilitate the transfer of funds within the state. The license was no longer needed as the company had already ceased its operations.
State commission lacks response to BlockFi’s request for license return
In December 2022, BlockFi attempted to submit a license, but did not receive a response from the commission. However, Blockfi was sent a notice from the state to revoke its license and order it to stop doing business within the state in February. This came as a surprise to the company, given the steps it had taken to return licenses and because it halted all of its activities when it filed for bankruptcy last year.
BlockFi subsequently attempted to submit the license but did not receive a response. Instead, the commission informed the company that it would have to pay a fine of $1 million to avoid court proceedings.
Concerned about the situation, BlockFi was left with no choice but to sue the Connecticut Banking Commissioner. The company is heavily indebted despite getting approval to sell its assets earlier this year. It aims to reach a settlement with its customers instead of engaging in a protracted court case or paying in the form of unreasonable charges.
In its statement, BlockFi Stressed on He:
“The department’s self-help actions to cancel licenses and assess monetary penalties are in pursuit of its economic interest and do not seek to protect public health, safety or welfare.”
BlockFi is attempting to stall the court proceedings and clarify that the state is wrong and violating the law by revoking its license and seeking civil penalties.
A court hearing has been set for July 6, during which BlockFi can present arguments in support of its position and potentially avoid an administrative hearing scheduled for July 20. The outcome of the July 6 court process may determine whether the July 20 court meeting will proceed. ,
Temytop is a writer with over four years of experience writing in various fields. He has a special interest in the fintech and blockchain space and enjoys writing articles in those areas. He holds bachelor’s and master’s degrees in linguistics. When not writing, he trades forex and plays video games.
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