Famous Cryptocurrency Platform SEC Penalty: Operations Stopped!

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BlockFi, one of the largest cryptocurrency lending companies, is preparing for a $100 million settlement with the US securities regulator, the SEC. As part of the deal, BlockFi will stop offering new interest-bearing accounts to US customers.

Cryptocurrency company will pay $ 100 million

BlockFi is one of many companies taking action to offer bank-like services to crypto holders. It accepts cryptocurrency deposits for a set period of time and pays customers interest just like banks do with fiat deposits. However, banks pay around 0.1 percent for deposits, while similar companies, including BlockFi, Celsius and Gemini, pay anywhere from 3-18 percent.

These companies claim that they can pay such high rates because institutional customers are willing to pay even more to access these cryptocurrencies. But BlockFi’s days seem to be coming to an end, at least in the US. According to sources with knowledge of the matter, the company has reached a $100 million settlement with the Securities and Exchange Commission (SEC) over accusations that it offered illegal products to US customers.

Sources said the deal could be announced next week, according to Bloomberg. In addition to the penalty, BlockFi will also have to stop offering crypto products to new customers in the US. However, existing customers can be retained. “We can confirm that customers’ assets are protected and that customers will continue to earn crypto interest,” the spokesperson said.

SEC is investigating other companies

The news comes just weeks after reports surfaced that the SEC is investigating companies similar to BlockFi, Gemini, Celsius and Voyager Digital, which offer products similar to BlockFi. At the time, sources claimed that the SEC was investigating the entire field, but would initially focus on three. Gemini’s Carolyn Vadino said they voluntarily cooperated with the industry-wide investigation. But BlockFi has been in trouble with the authorities for several months now. Regulators in several states, including Kentucky, Alabama, and Texas, have ordered the company to cease operations.