US SEC agency may take action on crypto lending firm BlockFi

According to reports, the United States Securities and Exchange Commission (SEC) is planning to take legal action against the Crypto lending platform BlockFi. 

On 17 November, Bloomberg published a report on the crypto lending platform BlockFi. According to Bloomberg, the United States SEC agency is working on BlockFi to take action. Bloomberg claimed that a source citing this matter said that the SEC agency has an eye on the high yield interest rate of the firm, which is against the securities law. 

At present, the interest rate of the banks is 0.06%, while the interest rate of the BlockFi platform is 9.5% per year. This high percentage yield interest is very high over the traditional bank’s system. According to Bloomberg, the SEC agency will figure out whether BlockFi is violating the securities law or not. 

However, Mr. Zac Prince- CEO of BlockFi- already said that BlockFi’s products are not under the securities law. And also all the operations of the firm fall under the regulatory framework and compliance with the laws. 

This is not the first Time when BlockFi will go through scrutiny by the US regulators. Before this, many regulators of the US raised their concerns and took action against the BlockFi firm for violating securities law. 

In a separate statement, BlockFi firm claimed that they are under all the licensed and permission-based crypto operations but still regulators are taking action without any reason. And also they are targeting the platform because of the securities law, which is not a part of the offerings of the firm. 

SEC agency vs Lending products 

However at present, the SEC agency didn’t announce anything about their action on the BlockFi firm but still in the past they took action on the popular crypto exchange, coinbase, for their lending product.

Coinbase exchange was planning to launch a USDC yield interest program for their users but the SEC authority said that they will consider the upcoming lending product as unregistered securities. After the statement of the SEC agency, Coinbase exchange revoked its plan of USDC lending product.

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