BlockFi in SEC’s radar as its high-interest product comes under scrutiny

Karthik Subramanian

BlockFi’s crypto product where it offers high-interest rates to investors and users who deposit their crypto tokens with it has come under scrutiny from the Securities and Exchange Commission (SEC) as it offers much more than the normal rates that are offered by banks.

It may be noted that the SEC had recently prevented Coinbase from launching its lending product as it was not satisfied with the background of the program as the SEC continues to believe that most of the cryptos are securities and hence need to come under its purview and regulation. This has been vehemently opposed by cryptos like Ripple and that battle has been going on in the courts for some time now. Ever since Gensler took over as Chair, he has been very clear that companies that offer such crypto products should first discuss with it how they need to be regulated before going ahead with the same.

But so far, there has not been much clarity on what sort of regulations need to be adhered to and so now the SEC is rounding up those businesses that have launched already with products that have not got its approval as yet. They have been joined by states like New Jersey and Texas who have also questioned the product of BlockFi with New Jersey issuing a cease and desist order on it to stop taking in new accounts until through December. It has over half a million real accounts and has been doing good business with its products.

The SEC has so far not taken many actions against the platform but it would find it hard to justify allowing the continuation of the program while it shuts down other comparable businesses for the reason of regulation. The SEC would need to quickly come out with a regulation of the crypto industry to create a level playing field and make it clear for existing and new businesses on what is allowed to be run within the country and what is not. It also needs to quickly conclude on its cases against some of the crypto companies on whether they are securities or not so that it can start the regulation with a clear board which would be beneficial not just for the SEC but for the crypto industry as well.

Read this next

Digital Assets

Midas launches investment strategies for the ‘crypto winter’

Midas.Investments has released three new investment strategies on its custodial CeDeFi platform, creating new opportunities during the ‘crypto winter’.   The platform merges diverse approaches to digital asset management into single-click products to let investors gain steady profits in any market conditions — including the ongoing bear market. a custodial CeDeFi platform, CeDeFi: Unlocking the […]

Digital Assets Wallet adds several ERC-20 tokens

The product expansion includes representatives of the DeFi world, the Metaverse, and the largest stablecoins.

Market News

Savvy Investors to Profit Whether the Stock Market Rebounds or Not

Equities have gone up enormously since the low. SP500 has gained 13.88% since June 17. In August, the indices drifted sideways. On Wall Street, veteran investors expect a move in either direction.

Industry News

Wall Street-backed MEMX obtains SEC approval for options trading platform

The company has raised more than $135 million in funding from 18 stock trading and investing heavyweights, including BlackRock, Citadel Securities, and Morgan Stanley.

Industry News

Amundi US launches ESG strategy that seeks to outperform S&P 500

Amundi’s Responsible investing team includes more than 45 specialists, and its ESG analysis covers more than 13,500 issuers across debt and equity.

Industry News

Verto launches embedded FX payments solution

The Verto API automates currency conversions, tracks payments and exchange rates in real-time, and is being launched in the follow-up of a $10 million in Series A funding last year.

Industry News

SEC awards over $16m to whistleblowers after another successful enforcement action

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice.

Digital Assets

Ripple submits most succint explanation of Hinman issue in XRP lawsuit

It might be useful to get up to date as this could be the end of the road for the SEC.

Retail FX

TradingView integrates first Brazilian broker, Órama Investimentos

Órama offers all kinds of investment products, from fixed income to crypto-related funds.