BlockFi Is Suspected About Using FTX Funds To Pay SEC Fines

BlockFi, a crypto lender, is reportedly preparing to file for bankruptcy due to its extensive exposure to FTX. However, Ripple Counsel has raised some critical concerns about the two companies connection and its SEC settlement in the United States.

Ripple’s General Counsel, Stuart Alderoty, has discovered something fishy in the BlockFi and SEC settlement. According to him, nothing was ever “registered” under the agreement.

He questioned the first two payments on the $100 million penalties and whether they had been made. The Ripple General Counsel has asked the SEC to demonstrate BlockFi’s capacity to pay and its funding source.

FTX reports a $250 million loan to the cryptocurrency lending platform. However, consumer money is now frozen.

This raises the question of whether BlockFi paid the fine and whether some of the cash for that fee originated from FTX.

The SEC stated in a news release that it had filed charges against the crypto lender for failing to register the sales and offers of its loan product. The commission emphasized that this is the first action of its sort conducted against crypto lending platforms.

Alderoty criticized the SEC for labeling the BlockFi transaction as a “success” for regulatory enforcement. Meanwhile, the difficult lending platform abandoned its consumers.

Ripple CTO David Schwartz remarked that this might turn out to be worse. BlockFi borrowing cash from FTX to pay penalties can be linked to the company assets maintained in the cryptocurrency exchange.

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