$100M fine on Crypto lending platform BlockFi: Report
Reportedly BlockFi faced $100 million worth of fines from the US government agencies.
BlockFi is a crypto lending platform and this platform is known for its high Yield on crypto lending services. Right now BlockFi is giving up to 9.25% interest per annum. In 2021, many US government agencies raised concerns over the operations of BlockFi. And now all the raised issues against the BlockFi platform resulted in a big fine.
According to Bloomberg, BlockFi will pay a total of $100 million to different US government agencies. Reportedly it will pay $50 million to US Securities and Exchange Commission (SEC) and a rest of $50 million to various state regulators.
According to report, BlockFi violated rules by giving the highest return on the crypto lending to its users, which is 9.25%, very high over Bank’ 0.03%-0.06% per year.
For example, if a person will lend $1000,00 USDT then that person will earn around $9250 worth of USDT, while the same person will earn only a very small amount, probably nothing for a very small fund holders.
In 2021, regulators of New Jersey, Alabama, Kentucky, Vermont, and Texas raised their voices against such crypto lending platforms and claimed that high-interest returns are against laws. In particular, they claimed that BlockFi is not giving better protection to the safety of its users’ funds.
Madelyn McHugh, a spokesman from BlockFi, responded against such allegations and ensured that all the funds are fully protected.
We have been in productive ongoing dialogue with regulators at the federal and state level. We do not comment on market rumors. 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.”
According to experts, government agencies are targeting such platforms without any proper warning or improvement suggestions. In past many government officials stated that US regulators should not take action directly, instead they should guide these companies because laws and rules are still not developed and known perfectly.
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