BlockFi Will Pay $100M in Settlement With SEC, State Regulators Over High-Yield Accounts: Report

The company has been under investigation since at least November over the lending product, which offers yields as high as 9.5%.

AccessTimeIconFeb 12, 2022 at 6:24 p.m. UTC
Updated May 11, 2023 at 4:40 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Crypto lender BlockFi will pay the U.S. Securities and Exchange Commission (SEC) $50 million and stop opening new accounts of its high-yield lending product to most Americans as part of a settlement of an ongoing investigation into whether the product is a securities offering, according to a published report.

The settlement, as described by Bloomberg, does not appear to affect existing accounts.

BlockFi will also pay another $50 million to various state regulators, according to the report. The BlockFi Interest Accounts have faced scrutiny from securities regulators in New Jersey, Texas, Kentucky, Alabama and Vermont over the offering. Several of these states planned or issued cease-and-desist orders as part of their investigations throughout 2021.

The company has been under investigation since at least November over the lending product, which offers yields as high as 9.5%.

When asked about the report of the settlement, a BlockFi spokesperson would only say, "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."

Crypto lending in general has come under close SEC scrutiny in recent months. The SEC is reportedly investigating Voyager Digital, Gemini Trust and fellow crypto lender Celsius Network.

CORRECTION (Feb. 12 20:22 UTC): Makes clear that, according to the report, under the settlement BlockFi would be prohibited from opening new high-yield accounts to most Americans; existing accounts appear to be unaffected. Adds statement from BlockFi spokesperson.


Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Danny Nelson

Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.