Cryptocurrency Credit platform BlockFi has agreed to pay $100 million in settlements as part of investigations by the SEC and other US officials.
According to the information Bloomberg obtained from anonymous sources, BlockFi will also have to end the high-yield account application it offers to its US customers.
BlockFi spokesperson Madelyn McHugh said in her statements that she would “not comment on market rumors”.
In addition, McHugh provided the following information on the subject:
“I can say that our customers’ assets are protected on the BlockFi platform and that our customers who have interest accounts will continue to earn interest on cryptocurrencies as always.”
This comment by the spokesperson may mean that people who already have an account on the platform will continue to benefit from the interest income.
SEC Alleged BlockFi Provided Securities Service Without Registry
BlockFi, its customers bitcoin, Ethereum and Tether It works with a high interest payment model in exchange for locking cryptocurrencies on the platform. The company then lends these locked funds to other customers at higher interest rates. However, the SEC announced in November that BlockFi’s interest accounts are unregistered securities.
In return for depositing crypto money on the platform, returns of between 5% and 10% can be obtained.
The SEC also got involved after the states of Alabama, Kentucky, New Jersey, Texas and Vermont asked BlockFi to cease operations.
However, other cryptocurrency lenders, including Celsius, are under heavy scrutiny by state and federal regulators. While Coinbase was about to launch the high-yield loan product it had planned in September, it abandoned the project due to threats from the SEC.
This $100 million fine, if true, will go down in history as one of the biggest sanctions ever imposed on cryptocurrencies.