One of the biggest Crypto leaders, BlockFi, will have to pay a huge amount of $100 Million in order to settle the allegation made by the Securities and Exchange Commission. This is because it illegally offered a unique product that lends high-interest rates on special digital tokens.
The Penalty can be huge
The Penalty is not yet announced, and it is expected to be out in the next week. This Penalty could be the biggest Penalty ever imposed on any cryptocurrency firm based in the USA. According to the data, the crypto leaders attracted huge amounts. According to the reports of Bloomberg, BlockFi made their customers deposit more than ten billion dollars. The deposit exceeded more than the combined traditional savings account. According to the agreement, BlockFi won’t be able to open any new interest-yielding accounts. The Crypto firm used these accounts for generating high interest.
BlockFi Spokesman Madelyn McHugh commented on the issue
He said that the company is well aware of the situation in the market. They are trying to talk and negotiate with the state and the parties responsible to solve the matter. He further added that he would not like to comment on the market rumors. In an interview, he said, We can confirm that client assets are entirely safeguarded. The special BlockFi interest account will continue to earn all the crypto interest as they already have.
Gary Gensle keeps an eye on Crypto firms
Gary Gensle has been alarming different Crypto companies that are trying to become fast-growing Crypto firms. These companies are offering different services with high-interest rates. In order to gain massive profits, these companies often go out of the legal way. SEC warns all such companies and alarms them that they view their activities very carefully. The BlockFi firm will have to pay a considerable sum of $50 million as a fine to the SEC and another $50 million to the state. It is among the few companies that are targeting high-paying yields. Sometimes, these yields exceeded 10 %, which created doubt over these firms.
