Cryptocurrency Lender Will Pay $100 Million For Alleged Securities Infringement

Deepak Gupta February 14, 2022
Updated 2022/02/14 at 10:06 PM

US regulators are making it clear that cryptocurrency companies must follow conventional rules. Cryptocurrency lender BlockFi has sat with the Securities and Exchange Commission over allegations that the company allegedly offered interest-bearing accounts without filing them under the Securities Act. The company will pay $100 million in fines, including $50 million to settle charges from 32 states.

BlockFi also agreed to register for the sale of a new product, Yield, and promised to comply with SEC rules within the next 60 days. The company had been selling unregistered cryptocurrency interest accounts from March 2019 until today and has made “false and misleading” claims about the risks of the loans.

On a blog post, BlockFi launched the deal as a form of victory. The company saw this as “greater regulatory clarity” that helped the company and the industry move forward. US-based customers of their Internet accounts will not be able to add new assets until BlockFi Yield is registered, at which time their accounts will be switched.

The charges and settlement are the SEC’s first against a cryptocurrency lender and reflect a clear objective: the Commission is willing to accept such services as long as they honor rules deemed applicable. The move also comes in sync with a broader effort by US authorities to clarify the legal status of crypto assets. BlockFi’s fate, in this regard, may help other cryptocurrency companies start on a better footing.

All products recommended by Ploonge are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

Share this Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Thumbnails managed by ThumbPress