The Security Exchange Commission (SEC) announced on 14 February that they will be taking action against BlockFi, which is a crypto lending company. SEC said BlockFi failed to list its high yield accounts, which the agency considers securities.
The United States Security Exchange Commission discovered that BlockFi, the crypto lender, has been operating as an unregistered company for the past 18 months. BlockFi and the Security Exchange Commission (SEC) have settled at a penalty of $50 million. Along With another settlement amount of $50 million for similar changes in 32 different states.
The company will stop offering any unregistered products to the public and get any new products registered. Also, the company has been allotted 60 days to bring the business back as per the Investment Company Act provisions.
SEC chair Gary Gensler said, This is the first time they got a case related to crypto lending platforms. It was also mentioned that this settlement has made it clear that crypto markets have to comply with the Securities Act of 1933. Snd other securities laws like the Investment Company Act of 1940.
From March 4, 2019, until February 15, 2022, BlockFi has offered and sold Bilaxy Token (BIAs) to the public, AS per the SEC’s orders.
The Security Exchange Commission also added that other crypto lending companies like BlockFi must take notes from this resolution and comply with federal securities laws. But with the crypto market growing some laws might be made to either give them more freedom or curtail it .