Yesterday the SEC charged BlockFi LLC with 1) failing to register their retail crypto lending product “BlockFi Interest Accounts (BIAs)” under the 1933 Act and 2) failing to register as an “Investment Company” under the 1940 Act.
In a negotiated settlement, BlockFi agreed to pay $50 million in fines, cease offering BIAs until they’ve registered the product with the SEC, and cure their non-compliance with the Investment Company Act within 60 days. Failing to register their company and securities product with the SEC cost them both capital and the ability to generate revenue via BIAs. “This is a classic example of a company shooting itself in the foot by not frontloading regulatory compliance,” says Todd Kulkin, Partner and Chair of the Corporate Division at Warren Law Group. “This settlement arrests BlockFi’s momentum while giving their competitors an opportunity to leverage BlockFi’s innovation in the marketplace.”
If your company wants to take advantage of blockchain and avoid SEC fines and other penalties, you must have competent legal counsel. Contact the attorneys at Warren Law Group at (866) WLGROUP or email email@example.com to schedule your complimentary consultation.