Recall that on February 14, 2022, the US Securities and Exchange Commission (SEC) ordered BlockFi, a crypto lending platform, to pay the sum of $100 million as a penalty for failing to properly register and report its operations to the commission. BlockFi agreed to make the payment and made moves to comply with the Investment Act of 1933, under which the organization operates.
BlockFi, on November 7, 2022, rolled out a new crypto investment product after making the $100 million payment. The newly released crypto investment product will not be available to the general public but only to US-accredited investors.
This new product, BlockFi Yield, is being released at a time when many major players and competitors in the crypto lending industry are facing numerous challenges.
Voyager Digital and Celsius, two of BlockFi’s main competitors, froze customer accounts with funds in them and eventually declared bankruptcy.
BlockFi co-founder Flory Marquez told Yahoo Finance that while the most recent events in the crypto lending industry are a true test of BlockFi’s risk management protocol, they are positive that their advanced risk management framework will help them scale through.
Before the settlement between BlockFi and the Securities and Exchange Commission (SEC), BlockFi allowed investors from certain states of the US to save with them and earn a variable percentage of return on investments while also providing assets in the form of unsecured loans to borrowers on their platform.
For now, it is unclear how the new yield product differs from the company’s original interest account offering. Both BlockFi yield and BlockFi interest appear to have very similar terms and conditions.
So far, BlockFi is the only cryptocurrency company that has paid up to $100 million in settlements to the Securities and Exchange Commission in the United States.
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