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$100M to settle SEC registration case

Started by PocketOption, Feb 15, 2022, 05:29 pm

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$100M to settle SEC registration case

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$100M to settle SEC registration case

For years, cryptocurrency proponents have argued that regulators should not apply decades-old laws to the nascent asset class. However, at least one major corporation is now planning to register its products with the Securities and Exchange Commission; this move will have far-reaching repercussions for the industry.

Companies that provide digital asset lending have attracted tens of billions of dollars in deposits; they promise significantly higher rates than traditional savings accounts. Under Chairman Gary Gensler’s leadership, the SEC has repeatedly warned crypto platforms that companies must register with the agency or risk sanction.

The Blockchain Association’s executive director, Kristin Smith, said her trade group is “dedicated to working with Washington to build common-sense guardrails for the industry to operate inside.

BlockFi executives claim they can provide such high rates to users. According to them, the reason behind this is that institutional investors will pay them much more to borrow the deposits. The crypto-interest accounts, unlike bank accounts, are not federally insured, which the SEC also warned investors about on Monday. Current BlockFi customers can continue to collect interest on their existing investments as part of the SEC’s arrangement. However, the company cannot market the products to new American clients. The company has 60 days to comply with SEC standards; it should register a new crypto-lending product that will meet the agency’s requirements.

BlockFi to Pay $100M SEC Registration Case

BlockFi agreed to pay a $50 million penalty to the Securities and Exchange Commission (SEC) and another $50 million to other states. Numerous companies, such as Celsius Network and Gemini Trust Co., have proven extremely popular with individual investors due to their high dividends. For similar reasons, the SEC is also looking into Celsius, Gemini, and Voyager Digital Ltd.

A Gemini spokeswoman indicated at the time that the company was helping with an “industry-wide investigation” into crypto-yield products. Celsius said it was working with regulators to “operate in complete conformity with the law”. Moreover, a spokeswoman for Voyager said it was standard practice to be in touch with watchdogs. The SEC has not charged any of the businesses with any misconduct.

BlockFi, a cryptocurrency startup, agreed to pay $100 million to settle Securities and Exchange Commission and state claims that it failed to register as a lender with regulators.

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