BlockFi Stops Opening New Bitcoin Accounts After Being Fined $100 Million

Crypto-lending platform BlockFi has agreed to pay $100 million (about Rs 755 crore) to settle an investigation by the US Securities and Exchange Commission (SEC) and multiple state regulators. Let us tell you that the SEC alleges that BlockFi misrepresented its depositors about its ricks while reporting the fines imposed by the regulators. This is the largest ever fine against a cryptocurrency firm.

SEC Secretary Vanessa Countryman Order “BlockFi made a false statement to BIA (BlockFi Interest Account) investors regarding the level of risk in their loan portfolios,” it said. He said “BlockFi made a statement in several website posts that its [कंपनी के] Institutional loans were ‘generally’ over-collateralized, when in fact, most loans were not.”

BlockFi has confirmed a fine imposed by the SEC. press release issued. However, the company did not accept or deny the SEC’s findings.

The SEC’s findings also highlighted one of the main differences between centralized financial offering and decentralized financial (DeFi) lending platforms, where the positions and terms are held for each depositor and lender. are validated on the on-going blockchain.

BlockFi offers crypto asset interest accounts, which help users earn better interest than banks. However, the SEC has declared these interest-earning products as securities, as the crypto assets are used for lending and earning interest.

BlockFi also Announcement It is reported that the company is planning to register a new, regulatory compliant Lending Product, which will be the first of its kind in the crypto industry.

The massive freeze is being seen as a huge blow to the DeFi ecosystem. Speaking to TechCrunch, crypto-asset attorney Max Dilendorf says that the SEC has essentially “wiped out” the DeFi lending business model.

He added that any crypto platform wishing to provide an interest-bearing account would essentially need to become a public-trading company. This is in stark contrast to DeFi, which is largely operated by Decentralized Autonomous Organizations (DAOs). Firms that want to move in this direction must file an S-1 statement, which is similar to initiating an initial public offering (IPO). This costly process would also require investors to be accredited.<!–