Crypto Lending: BlockFi to pay $100 million fine to SEC

Must read

How the Metaverse could impact the lives of kids

The Metaverse is a virtual environment where people can carry out various tasks. The term “metaverse” was a term originally coined...

6 Questions for Dominik Schiener of the Iota Foundation

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to...

Ethereum in danger of 25% crash as ETH price forms classic bearish technical pattern

Ethereum's native token Ether (ETH) looks ready to undergo a breakdown move in May as it forms a convincing "bear pennant" structure.ETH price to...

Welcome to Mars: I own everything, have total privacy and life has never been better

This is a parody of the article published by the World Economic Forum titled “Welcome to 2030. I Own Nothing, Have No Privacy And...

U.S.Lending

BlockFi has agreed to pay a $100 million fine and also stop creating new accounts for US residents.

Crypto Lending: BlockFi to pay $100 million fine to SEC

Symbiosis

In what is set to be one of the toughest penalties against a cryptocurrency firm, details have now emerged that the foremost crypto lending platform, BlockFi, is set to pay a fine of $100 million to the Securities and Exchange Commission (SEC) of the United States government.

The company decided to pay the fine in a bid to settle an ongoing investigation into its activities by the commission.

BlockFi to stop new accounts creation

The investigation began following allegations that the firm was illegally offering a product that pays customers high-interest rates to lend out their digital tokens, according to people familiar with the matter.

Aside from the payment of this fine, Bloomberg reported that the firm would also stop creating new high-yield accounts for residents in the United States.

Speaking on the development, the company’s spokesperson, Madelyn McHugh, insisted that they would not comment on market rumors. However, McHugh confirmed that the assets of its clients were still safe on the platform

BlockFi offers customers high-interest rates for locking up their crypto assets like Bitcoin, Ethereum, and Tether into traditional bank-like savings accounts. These crypto-assets are then loaned out at higher rates to other clients. According to the SEC, the actions of BlockFi counts as exposing its US clients to unregistered securities.

The SEC was forced to launch an investigation into BlockFi operations when regulators in Alabama, Kentucky, New Jersey, Texas, and Vermont issued a cease and desist order and show cause to the crypto firm. This action spurred the federal regulator into investigating how BlockFi operates its business.

Notably, this is not the first time that the SEC has reacted strongly to cases of crypto lending. In one of our earlier reports, we revealed that Coinbase was forced to cancel its plans for a similar service after the Gary Gensler-led commission threatened to sue the crypto exchange if it went ahead with its plan.

Everdome

CryptoSlate Newsletter

Featuring a summary of the most important daily stories in the world of crypto, DeFi, NFTs and more.

Get an edge on the cryptoasset market

Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.

On-chain analysis

Price snapshots

More context

Join now for $19/month Explore all benefits

More articles

Latest article

How the Metaverse could impact the lives of kids

The Metaverse is a virtual environment where people can carry out various tasks. The term “metaverse” was a term originally coined...

6 Questions for Dominik Schiener of the Iota Foundation

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to...

Ethereum in danger of 25% crash as ETH price forms classic bearish technical pattern

Ethereum's native token Ether (ETH) looks ready to undergo a breakdown move in May as it forms a convincing "bear pennant" structure.ETH price to...

Welcome to Mars: I own everything, have total privacy and life has never been better

This is a parody of the article published by the World Economic Forum titled “Welcome to 2030. I Own Nothing, Have No Privacy And...

Binance CEO CZ to support Terra community but expects more transparency

Pointing out the potential issues with forking Terra, CZ said that “Minting, forking, don’t create value.” 23086 Total views 60...