Crypto lending platform BlockFi on Tuesday attracted regulatory action for breaching rules in offering securities. An order was recently issued against the lender as part of a multi-state probe including the SEC and state level regulators.
Breach In BlockFi Securities Sale
According to a statement by Iowa’s insurance division, BlockFi “offered and sold securities in Iowa that were not registered or permitted for sale” in the state. Additionally, the lender offered and sold securities in the state without being registered as a broker-dealer or agent, said Iowa insurance commissioner Doug Ommen. He further stated,
“While innovations, like cryptocurrencies, may provide for growth and evolution in the financial system, it is important that regulators ensure this occurs within an appropriate framework. The framework should protect investors while still facilitating responsible capital formation.”
In March this year, BlockFi was in the news over a security compromise for some of its customer data. At the time, personal information like names, emails and phone numbers of its clients were said to have been accessed.
$100 Million In Settlements In Various States
After the investigation, BlockFi will pay settlements up to $50 million in total to the 53 jurisdictions. Also, another $50 million would be paid to the SEC.
