According to reliable sources, the U.S. Securities and Exchange Commission wants to fine the crypto lending platform $50,000,000 for offering unregistered securities.
Now, it is known that $50 million more will be paid out to five states in which BlockFi is under investigation.
BlockFi paid the large fee after the SEC conducted an ongoing investigation into the company’s activities.
In January, Gary Gensler, Chairman of the SEC, announced that crypto exchanges would be subject to increased scrutiny.
SEC Smells Fishy
The SEC has been probing Ripple since 2020. However, BlockFi was first placed under scrutiny by the SEC in November last year.
According to the SEC BlockFi’s high-yielding accounts are unregistered securities.
A statement was issued by the crypto lending platform reassuring investors of the fact that both SEC and state regulators are still involved in discussions.
“We have had a great working relationship with both federal and state regulators. According to the update, market rumors are not something that we are interested in discussing.
BlockFi Leg and Arm Fees – SEC Fee
These penalties are the most severe ever imposed on a cryptocurrency company in the face a U.S. crackdown.
BlockFi Interest accounts have been questioned by security officials in Texas, New Jersey, Kentucky, Alabama, and Vermont.
Several of these states issued cease and desist orders in 2021 as part of their investigations.
BlockFi’s business model is to pay customers high interest rates for cryptos like Bitcoin, Tether, and Ethereum.
Madelyn McHugh from BlockFi stated that the New Jersey-based crypto firm would not comment on speculations about the development.
McHugh assured customers that their funds would be safe on the platform, despite this.
Offer for Mouth-Watering
The claims that crypto-lenders can attract tens to billions of dollars in deposits and promise returns far greater than traditional savings accounts have led to criticism.
BlockFi is also a popular retail investor choice because of their high yields.
BlockFi responded to questions about the legitimacy and reliability of their yield rates that can sometimes exceed 10%.
According to the company it can maintain current interest rates because it lends money out to institutions.
A lending product was placed on hold in September by the SEC after Coinbase Global Inc., America’s largest crypto exchange, received a warning from the SEC that it would file charges against it if it continued with the loan product.
