California moves to suspend BlockFi’s lending license in state

California’s Department of Financial Protection and Innovation issued a notice to suspend crypto lender BlockFi’s license in the state for 30 days pending an investigation into the company’s announcement that it had halted client withdrawals following the collapse of the FTX exchange.

“The DFPI is investigating BlockFi’s compliance with the laws within the Commissioner’s jurisdiction, including the California Financing Law,” the agency said in a statement, adding that it is also investigating FTX. 

The regulator said that BlockFi reported it had ceased offering loans in California. In February, BlockFi was ordered to stop and refrain from offering or selling unqualified, non-exempt securities in the form of Blockfi interest accounts in the state.

BlockFi said Thursday that it was “shocked” by news reports about the troubled FTX and that it would limit platform activity and pause client withdrawals “as is allowed under our Terms.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.