BlockFi to Pay $100 Million for Settlement with SEC and States

BlockFi has reached a settlement of a total of $100 million with the US Securities and Exchange Commission (SEC) and other state regulators who are investigating the crypto lender for illegally offering cryptocurrency lending products to Americans, Bloomberg reported.

Out of the total settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term proceeds, $50 million will go to the SEC, while the rest will be distributed among several state regulators of New Jersey, Texas, Kentucky, Alabama and Vermont, the anonymous sources of the publication revealed. The official announcement of the settlement is expected to come out this week.

Some of these financial market regulators even issued cease-and-desist orders against BlockFi.

Though the crypto platform will have to stop opening new accounts under the settlement agreements, it will not impact existing clients.

The Business of Crypto Lending

BlockFi allows retail users to lend their cryptocurrencies for yields as high as 9.5 percent. Earlier, the company executives explained that it is able to offer such a high yield Yield A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a A yield is defined as the earnings generated by an investment or security over a particular time period. This is in typically displayed in percentage terms and is in the form of interest or dividends received from it.Yields do not include the price variations, which differentiates it from the total return. As such, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as a Read this Term as institutional investors are ready to offer even higher interest against their crypto borrowings.

But, the company’s business remains unregulated. That has raised the eyebrows of many American regulatory agencies over the recent months. The platform has been facing regulatory scrutiny since at least November 2021.

“We have been in productive ongoing dialogue with regulators at the federal and state level. We do not comment on market rumors,” a BlockFi spokesperson told media when commenting on reports of the settlement. “We can confirm that clients’ assets are safeguarded on the BlockFi platform, and BlockFi Interest Account clients will continue to earn crypto interest as they always have.”

Apart from BlockFi, other crypto lending platforms in the United States are facing regulatory scrutiny. Several state regulators took the lead in taking action against the crypto lending schemes. Furthermore, the SEC is reportedly probing Celsius Network, Voyager Digital and Gemini Trust.

Meanwhile, BlockFi recently received a license in Bermuda that will help the company’s global expansion push.