The US-based financial service platform BlockFi has agreed to pay a $100M penalty to the regulatory authorities.
As crypto regulations in the United States are still uncertain, multiple financial service providers that offer digital asset products have been under scrutiny. In fact, BlockFi offers high-yield lending services that are unregulated. This led to the DeFi platform being under the microscope by government authorities.
On February 12th, Bloomberg reported that BlockFi has reached an agreement with state regulators and the US Securities and Exchange Commission to pay a $100 million fine, with half of it going to the SEC, and the rest will be distributed amongst regulators in New Jersey, Alabama, Texas, Vermont, and Kentucky.
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BlockFi has dealt with regulators since November last year due to the platform offering users crypto lending in the US, which was deemed to be illegal by the authorities. Alongside the penalty, new users won’t be able to open accounts on BlockFi.
However, according to a spokesperson from BlockFi, existing clients will keep their access to the platform, stating:
"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."
The report has been quite timely considering that earlier this month the US Commissioner Hester Peirce announced that the SEC is allegedly looking to bring the hammer down on DeFi platforms.
