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SEC Shuts Down Crypto Lending Platform BlockFi and Fines It $100M

By Tim Sloane
February 15, 2022
in Analysts Coverage, Cryptocurrency, Digital Assets & Crypto
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SEC Shuts Down Crypto Lending Platform BlockFi and Fines It $100M

SEC Shuts Down Crypto Lending Platform BlockFi and Fines It $100M

At times it appears Fintech gets away with not following regulations, but the SEC just stopped BlockFi from offering its lending program in the U.S. until it addresses regulatory requirements. For dodging these requirements it has been issued a fine of $100 million:

“A cryptocurrency company that allowed nearly 600,000 users to earn interest by lending their holdings to other traders will pay $100 million to settle claims that its product violated investor-protection laws.

BlockFi Lending LLC, which held as much as $14.7 billion in assets at its peak last year, will pay the highest fine ever agreed to by a cryptocurrency company, Securities and Exchange Commission officials said. The settlement is the first enforcement action targeting a crypto lending platform, according to the SEC. The company neither admitted nor denied wrongdoing.

BlockFi and its competitors amassed customers in recent years as crypto traders discovered they could reap yields much higher than interest rates paid by most banks or bond issuers. The company didn’t seek approval to act as a bank or money manager, and its interest-bearing accounts weren’t registered with federal bank or securities regulators.

BlockFi will stop offering the accounts in the U.S. and will seek to register a new product, BlockFi Yield, under SEC rules.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

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Tags: cryptoCryptocurrenciesCryptocurrencyLendingRegulationsSEC

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