• 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.

The crypto platform agreed to pay the SEC $50 million to settle the charges without denying or admitting to the act. BlockFi will also pay another $50 million to 32 states over similar charges.

“This is the first case of its kind with respect to crypto lending platforms,” SEC Chair Gary Gensler said. “Today’s settlement makes clear that crypto markets must comply with time-tested securities laws.”

“From the day we started BlockFi, we have always known that strong engagement with regulators would be critical for the adoption of financial services powered by cryptocurrencies,” BlockFi CEO and founder Zac Prince said in a statement.

“Today’s milestone is yet another example of our pioneering efforts in securing regulatory clarity for the broader industry and our clients, just as we did for our first product – the crypto-backed loan,” he added.

The SEC also warned other cryptocurrency lenders that offer services similar to BlockFi’s, with Gurbir S. Grewal, director of the agency’s enforcement division, saying they “should take immediate notice of today’s resolution and come into compliance with the federal securities laws.”