According to Bloomberg’s report, the US Securities and Exchange Commission (SEC) has started to examine the American crypto lending application BlockFi.
The SEC will look into whether the New Jersey-based crypto lender BlockFi’s products, with high interest yields of 9.5%, qualify as securities.
Because the BlockFi company is committed to giving an annual interest rate of 9.5%, which is higher than the average 0.06% interest earned on a bank’s savings account.
Although BlockFi claims that its products are not securities, the fact that the SEC has started an investigation on this issue shows that the SEC does not agree with BlockFi.
If the SEC concludes that crypto lending firm BlockFi’s products are securities, the products will need to be registered as securities with the SEC.
The SEC’s review isn’t the first to launch an investigation into BlockFi. Earlier this year, multiple US government agencies launched an investigation into BlockFi.
The corporate value of the company, which has more than 500,000 retail accounts, has recently exceeded $4 billion.
While the SEC has not yet made a statement about any injustice regarding BlockFi, both the BlockFi company and the SEC spokesperson declined to comment on the subject.