BlockFi will register its high-yield crypto lending product with the U.S. Securities and Exchange Commission (SEC) as part of a $100 million settlement over the controversial offering.
The crypto lender said Monday it intends to confidentially file a draft registration statement with the SEC for a new crypto lending product called BlockFi Yield. Doing so would be the first formal step in a bureaucratic slog toward offering a registered securities product to the public.
The S-1 announcement came in tandem with official confirmation of BlockFi’s $100 million fine. BlockFi will pay the SEC $50 million and an additional $50 million to 32 states to settle allegations that its flagship BlockFi Interest Account (BIA) was an unregistered security.
BlockFi cooperated with the government’s investigation and implemented remediation actions, according to an SEC press release. Both the SEC and state-level agreements contain no admission or denial of wrongdoing or liability.
“This is the first case of its kind with respect to crypto lending platforms,” SEC Chair Gary Gensler said in a statement. “Today’s settlement makes clear that crypto markets must comply with time-tested securities laws.”
Existing BIA clients in the U.S. will continue to receive interest payments but cannot add more crypto to their accounts as of today, the company said in a statement. Those accounts will automatically roll over into BlockFi Yield once the registration process is complete.
CORRECTION (Feb. 14, 16:20 UTC): Removes mention of public listing. The S-1 filing is specific to BlockFi Yield, not plans for a stock offering.
UPDATE (Feb. 14, 16:28 UTC): Adds Gensler comment.
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