{"id":80732,"date":"2022-02-15T01:36:00","date_gmt":"2022-02-15T06:36:00","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=80732"},"modified":"2022-02-15T01:36:00","modified_gmt":"2022-02-15T06:36:00","slug":"blockfi-agrees-to-pay-100-million-in-penalties-and-pursue-registration-of-its-crypto-lending-product","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/02\/2022\/blockfi-agrees-to-pay-100-million-in-penalties-and-pursue-registration-of-its-crypto-lending-product.html","title":{"rendered":"BlockFi Agrees to Pay $100 Million in Penalties and Pursue Registration of its Crypto Lending Product"},"content":{"rendered":"\n

(HedgeCo.Net) The Securities and Exchange Commission has charged BlockFi Lending LLC (BlockFi)<\/strong> with failing to register the offers and sales of its retail crypto lending product. In this first-of-its-kind action, the SEC also charged BlockFi with violating the registration provisions of the Investment Company Act of 1940. To settle the SEC\u2019s charges, BlockFi agreed to pay a $50 million penalty,<\/strong> cease its unregistered offers and sales of the lending product, BlockFi Interest Accounts (BIAs), and attempt to bring its business within the provisions of the Investment Company Act within 60 days. BlockFi\u2019s parent company also announced that it intends to register under the Securities Act of 1933 the offer and sale of a new lending product. In parallel actions announced today, BlockFi agreed to pay an additional $50 million <\/strong>in fines to 32 states to settle similar charges.<\/p>\n\n\n\n

“This is the first case of its kind with respect to crypto lending platforms,” SEC Chair Gary Gensler said. “Today\u2019s settlement makes clear that crypto markets must comply with time-tested securities laws, such as the Securities Act of 1933 and the Investment Company Act of 1940. It further demonstrates the Commission\u2019s willingness to work with crypto platforms to determine how they can come into compliance with those laws. I\u2019d like to thank and commend our remarkable SEC staff and state regulators for their efforts and collaboration on this settlement.”<\/p>\n\n\n\n

“Crypto lending platforms offering securities like BlockFi\u2019s BIAs should take immediate notice of today\u2019s resolution and come into compliance with the federal securities laws,” said Gurbir S. Grewal, Director of the SEC\u2019s Division of Enforcement. “Adherence to our registration and disclosure requirements is critical to providing investors with the information and transparency they need to make well-informed investment decisions in the crypto asset space.”<\/p>\n\n\n\n

According to the SEC\u2019s order, from March 4, 2019 until today, BlockFi offered and sold BIAs to the public. Through BIAs, investors lent crypto assets to BlockFi in exchange for the company\u2019s promise to provide a variable monthly interest payment. The order finds that BIAs are securities under applicable law, and the company therefore was required to register its offers and sales of BIAs but failed to do so or to qualify for an exemption from SEC registration. Additionally, the order finds that BlockFi operated for more than 18 months as an unregistered investment company because it issued securities and also held more than 40 percent of its total assets, excluding cash, in investment securities, including loans of crypto assets to institutional borrowers.<\/p>\n\n\n\n

The order also finds that BlockFi made a false and misleading statement for more than two years on its website concerning the level of risk in its loan portfolio and lending activity.<\/p>\n\n\n\n

Without admitting or denying the SEC\u2019s findings, BlockFi agreed to a cease-and-desist order prohibiting it from violating the registration and antifraud provisions of the Securities Act and the registration provisions of the Investment Company Act. BlockFi also agreed to cease offering or selling BIAs in the United States.<\/p>\n","protected":false},"excerpt":{"rendered":"

(HedgeCo.Net) The Securities and Exchange Commission has charged BlockFi Lending LLC (BlockFi) with failing to register the offers and sales of its retail crypto lending product. In this first-of-its-kind action, the SEC also charged BlockFi with violating the registration provisions […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-80732","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=80732"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80732\/revisions"}],"predecessor-version":[{"id":80733,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80732\/revisions\/80733"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=80732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=80732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=80732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}