BlockFi faces $100 million in penalties over crypto interest accounts: report

Bloomberg News reported late Friday that the crypto lending platform BlockFi will pay $100 million to settle investigations into its interest-generating accounts, which last year drew public scrutiny from state-level securities regulators in the US.

Citing sources with knowledge of the process, the news outlet said that $50 million would be paid to the Securities and Exchange Commission and an additional $50 million to state regulators. An announcement is pending and may come “as soon as next week,” per Bloomberg.

As previously reported, regulators in New Jersey, Alabama, Texas, Kentucky and Vermont began investigating whether BlockFi’s offering falls under the definition of securities, a conclusion that BlockFi has pushed back against in past public statements on the issue. 

These moves came amid a broader inquiry in the US into crypto lending companies. SEC chief Gary Gensler has pointed to crypto lending as an area of interest as his agency widens its oversight of the US crypto sector.

In a statement posted to Twitter Friday evening, BlockFi said that “we have been in a productive ongoing dialogue with regulators at the federal and state level.”

“We do not comment on market rumors,” the company continued. “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.”