The alleged BlockFi $100 million in fines would be one of the most significant SEC penalties ever paid by a cryptocurrency business.
BlockFi, a cryptocurrency lending platform, has agreed to pay $100 million to settle ongoing investigations by the Securities and Exchange Commission and several state securities agencies.
According to a Bloomberg article based on unidentified sources, the company will likewise stop accepting new high-yield accounts from the majority of US consumers.
Madelyn McHugh, the company’s representative, said that the company would “not comment on market rumors.”. She added:
“We can confirm that clients’ assets are safeguarded on the BlockFi platform and BlockFi Interest Account clients will continue to earn crypto interest as they always have.”
The company’s business concept involves paying clients high interest rates in exchange for storing cryptocurrencies like Bitcoin, Ethereum, and Tether in savings accounts. The money are then lent out at even larger interest rates by the corporation. However, the SEC stated in November that these BlockFi Interest Accounts, which may earn 5 to 10%, are unlicensed securities.
The SEC became concerned after a group of five state securities regulators—from Alabama, Kentucky, New Jersey, Texas, and Vermont—issued show-cause or cease-and-desist orders requesting that the company stop providing services to their people.
Other crypto lenders, like Celsius, are being reviewed by state and federal officials. Coinbase canceled its intended high-yield Lend program in September after the SEC threatened to litigate.
If correct, the $100 million settlement would be one of the largest cryptocurrency disciplinary actions.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews