A popular crypto lending platform is reportedly going to pay out $100 million to resolve accusations from state and federal regulatory agencies.
Sources familiar with the matter tell Bloomberg that BlockFi is gearing up to settle allegations involving the firm’s financial product that pays out high-interest rates to consumers for lending out their crypto assets.
According to BlockFi’s website, the company offers a high-interest product that allows users to up to 9.25% annual percentage yield (APY) in crypto.
State regulators along with the U.S. Securities and Exchange Commission (SEC) say that the crypto lending service may be offering products that act as securities and thus would be subject to regulations.
The anonymous sources say that BlockFi will no longer be able to issue new accounts that yield interest for most Americans as part of the agreement. The sources also reveal that BlockFi will pay $50 million in fines to the SEC and another $50 million to a number of state agencies.
Here’s BlockFi’s statement on the matter:
“We have been in productive ongoing dialogue with regulators at the federal and state level. We do not comment on market rumors.
We can confirm that clients’ assets are safeguarded on the BlockFi platform and BlockFi Interest Account clients will continue to earn crypto interest as they always have.”
In September, US-based crypto exchange COINBASE had to abandon its plans to offer a similar product after receiving threats of legal action from the SEC.
