BlockFi pays $100 million fine to settle SEC investigation

BlockFi, the leading crypto lending platform, has decided to file a $100 million fine with the United States Securities and Exchange Commission (SEC). This is considered one of the harshest penalties for a crypto company.

The move was created by BlockFi to address an ongoing investigation into its practices, which began after allegations that the company illegally provided a product that paid customers hefty interest for token lending.

In addition to this penalty, Bloomberg reports that the company will also stop creating new high-yield accounts for people in the United States.

Speaking about the development, a company spokeswoman, Madelyn McHugh, confirmed that they would not comment on market rumors. However, McHugh confirmed that customers’ assets remain safe on the platform.

BlockFi offers customers high interest rates for locking their crypto assets like Bitcoin, Ethereum, and Tether in traditional bank-like savings accounts.

These crypto assets are then lent to other customers at a higher interest rate. According to the SEC, BlockFi’s actions are exposing its US clients to unregistered securities.

The SEC was forced to launch an investigation into BlockFi’s practices when regulators in Alabama, Kentucky, New Jersey, Texas and Vermont issued cease and desist orders against the company. The action prompted federal regulators to investigate how BlockFi operates its business.

Notably, this isn’t the first time the SEC has reacted heavily to crypto lending cases. Previously, Coinbase was forced to scrap plans for a similar service after the SEC threatened to sue the exchange if it went ahead with its plan.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page