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What happened to BlockFi?
BlockFi was a crypto lender that paid interest on deposited coins. In February 2022 it agreed to pay $100 million in penalties to the SEC and 32 states over its interest accounts. In November 2022 it filed for bankruptcy in New Jersey.
What it means for you
An account that pays interest on your coins lends them out, so you carry the risk of that lending. If the lender fails, getting your coins back depends on a bankruptcy court.
How it works
On February 14, 2022 the SEC charged BlockFi Lending LLC with failing to register offers and sales of its BlockFi Interest Accounts, which it found were securities: customers lent crypto to BlockFi for a variable monthly interest payment. The SEC found BlockFi made a false and misleading statement for more than two years on its website about the level of risk in its loan portfolio. BlockFi paid a $50 million SEC penalty and agreed to pay $50 million to 32 states. BlockFi Inc. is Chapter 11 case 22-19361 in the US Bankruptcy Court for the District of New Jersey.
Sources: SEC: BlockFi agrees to pay $100 million in penalties (2022-26), US Bankruptcy Court, District of New Jersey: BlockFi Inc., 22-19361 · checked 5 October 2026
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