BlockFi Agrees To Pay $100 Million Penalty To Stop SEC Investigation

BlockFi platform offers users high-interest rates for investing and locking in cryptocurrencies into savings accounts. Then, the company loans those funds at even higher interest rates. According to the SEC, BlockFi interest accounts that yield 5% to 10% are actually unregistered securities.

State Securities Regulators Issued Cease-And-Desist Orders

The SEC focused its attention on BlockFi after multiple state securities regulators from Alabama, Kentucky, Texas, and Vermont, issued show causes or cease-and-desist orders, requiring that BlockFi stops offering its services to the states’ citizens.

BlockFi’s spokesperson would not comment on market rumors. Still, she added that the users’ accounts are safe and that they’ll continue earning interest as they always have.

However, BlockFi agreed to pay a $100 million penalty to settle the ongoing SEC investigation. According to other sources, the platform also discontinued new high-yield accounts for most US residents. This penalty could also be one of the largest ever paid by a cryptocurrency company.

Consequently, other crypto decentralized finance platforms are now under the eyes of state and federal regulators, one of them being BlockFi competitor Celsius.

Celsius Network currently has about one million users globally and promises a 17% yield on their crypto. Celsius holds $19.7 billion in assets and has paid over $871 million in yields and rewards so far.