BlockFi Agrees to $100 Million Settlement With SEC, States Over Lending Product
Crypto lending and interest startup BlockFi Lending LLC agreed on Monday to pay $100 million to the Securities and Exchange Commission (SEC) and 32 states to settle charges over failing to register its retail cryptocurrency lending product, BlockFi Interest Accounts.
The company, backed by billionaire Peter Thiel, will pay the SEC $50 million and cease offering its high-yielding lending product to most U.S. customers as part of the settlement. It will also pay $50 million to various state regulators. “This is the first case of its kind with respect to crypto lending platforms,” SEC Chair Gary Gensler said in a statement announcing the settlement.
“Today’s settlement makes clear that crypto markets must comply with time-tested securities laws," Gensler said in the statement. «It further demonstrates the Commission’s willingness to work with crypto platforms to determine how they can come into compliance with those laws.»
BlockFi, which offers yields on popular digital assets like Bitcoin, Ethereum, and Tether (USDT) as high as 9.25%, has faced scrutiny from regulators throughout most of 2021. The crypto lender claims it can offer higher interest rates than traditional financial institutions as larger investors are prepared to pay more to borrow crypto deposits.
Tether is a blockchain-based cryptocurrency whose tokens in circulation are supposedly backed by an equivalent amount of U.S. dollars, making it a stablecoin with a price pegged to USD $1.00.
BlockFi’s CEO and founder Zac Prince said in a statement that the settlement provides regulatory clarity for other crypto lenders. “Today's milestone is yet another example of our pioneering efforts in securing regulatory clarity for the broader industry and our clients, just
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