Blockfi SEC Settlement (2022) event

Event · PageRank 0.0000

Overview

On 14 February 2022 the U.S. Securities and Exchange Commission announced settled charges against BlockFi Lending LLC over its BlockFi Interest Accounts (BIAs), retail products that paid interest on deposited crypto. The SEC found that BIAs were unregistered securities, that BlockFi had operated as an unregistered investment company, and that it had made materially false and misleading statements about the level of risk in its loan portfolio. BlockFi agreed to pay $50 million to the SEC and a further $50 million to 32 states, to stop offering unregistered BIAs, and to seek to bring its business into compliance with the Investment Company Act within 60 days. The $50 million SEC penalty was the largest against a crypto firm at that time.

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Frequently asked questions

How much did BlockFi pay?

$100 million in total: a $50 million penalty to the SEC and $50 million in payments to 32 US states.

What were the SEC's findings?

That BlockFi Interest Accounts were offered and sold as unregistered securities, that BlockFi operated as an unregistered investment company, and that it made materially false and misleading statements about the risk in its lending activity.

What did BlockFi agree to do?

To cease unregistered offers and sales of BIAs to the public and to attempt to bring its business within the Investment Company Act's provisions within 60 days, while existing investors could continue earning interest under original terms.