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Iowa Grants BlockFi License To Operate Even Though The Platform Is In Trouble

Just two weeks after being fined by Iowa regulators for selling unregistered securities, crypto lending platform BlockFi has received a Money Services License in the state.

The Iowan license will allow residents to lend cryptocurrency, deposit, and make crypto payments on BlockFi in the state. Additionally, the platform said it will start by allowing Iowans to transact in stablecoins.

In February 2022, a major penalty was handed down by the US Securities and Exchange Commission (SEC) to the crypto lending platform because it illegally offered its products to customers, as well as a violation of the Investment Company Act of 1940.

Then on June 14, the Iowa Insurance Division (IID) responsible for securities in the state fined BlockFi more than $943,000 for violating the Regional Securities Act.

The trouble with the SEC has resulted in the largest fine ever imposed by the federal regulator on the crypto business. Accordingly, the platform must pay up to $100 million, half of which is paid to the SEC and the other half to 32 states and similar fees.

However, in the context of the difficult market, BlockFi is no exception when the company was affected by the investment fund Three Arrow Capital (3AC) and was forced to cut 20% of its staff.

Recently, BlockFi is also said to be in talks with FTX to sell shares. Commenting on this news, a spokesperson of the platform said:

“BlockFi does not comment on market rumors. We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date.”

However, Anthony Pompliano’s Morgan Creek is trying to work out a $250 million FTX alternative deal to buy a majority stake in BlockFi.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.