The Securities and Exchange Commission (SEC) announced yesterday that cryptocurrency firm BlockFi Lending LLC will pay $100 million to settle claims it failed to register its crypto lending account product with federal and state regulators, The Hill reported. BlockFi yesterday agreed to pay $100 million split between the SEC and 32 states and end its BlockFi Interest Accounts (BIAs), which allowed cryptocurrency holders to deposit their digital tokens with the company in exchange for interest. BlockFi would lend and invest the cryptocurrency to generate interest for the accounts and held roughly $10.4 billion in assets for roughly 570,000 BIA account holders, according to the settlement. The SEC charged BlockFi with violating 82-year-old federal rules that require companies that offer securities — including investment contracts — to register those products with the agency. "This is the first case of its kind with respect to crypto lending platforms," SEC Chairman Gary Gensler said. "Today’s settlement makes clear that crypto markets must comply with time-tested securities laws. BlockFi agreed to offer a new version of the BIA registered with the SEC under the Securities Act of 1933, one of the first federal laws governing the sale of stocks and other investment products. The company did not admit to any wrongdoing, per the terms of the settlement.
