BlockFi Agrees to Pay the SEC $50 Million To Settle Charges Related To Crypto Lending

35
SHARE
BlockFi
BlockFi
  • Cryptocurrency firm BlockFi said Monday it has agreed to pay $100 million to the U.S. Securities and Exchange Commission and several states to settle charges related to its popular crypto lending product.

BlockFi is a crypto firm backed by Silicon Valley investor Peter Thiel who is an author and one of the PayPal mafia members. The firm offers savings product that lets clients claim interest on their cryptocurrencies holdings.

The platform promotes annual percentage yields of 9.25% on its website. The figure is higher than the average savings rates on offer from incumbent financial institutions. BlockFi argues that it’s able to offer such high rates because major institutional investors are ready to pay more to borrow the deposits.

Cryptocurrencies are still troubling the SEC

However, Bitcoin — among several other cryptocurrencies — is not regulated and scrutiny still surrounds the new industry. The SEC said Monday it had charged BlockFi with failing to register its retail crypto lending product and violating the registration provisions of the Investment Company Act of 1940.