Crypto Lender BlockFi To Pay $100M in Fines to US Regulators

BlockFi calls the $50 million in fines to the SEC and a further $50 million to state regulators over its high-interest crypto product “a landmark resolution”


Blockworks exclusive art by Axel Rangel


key takeaways

  • The penalties extend from the SEC’s review of BlockFi’s high-interest yield account last year
  • The lender is prohibited from offering US citizens any new products that resemble its high-interest yield account, while it seeks to register a similar compliant product

Cryptocurrency lending platform BlockFi is expected to pay $100 million in fines to the Securities and Exchange Commission (SEC) and other state regulators over allegations it illegally offered a high-interest yield product.

BlockFi will pay $50 million to the SEC and a further $50 million to various state regulators, according to a Bloomberg report on Friday, which cited people familiar with the matter and confirmed by BlockFi on Monday. US customers will no longer be able to open any new interest-yielding accounts.

In a Twitter thread, Monday, Prince wrote that the settlement “identifies a clear path forward for folks to earn interest on their crypto.”

Loading Tweet..

The penalties come as US authorities continue to spotlight crypto lending activity deemed to be outside the purview of the country’s financial regulations.

BlockFi’s interest account (known as BIA) allows users to lend out their crypto for up to 9.25% in annual percentage yield. A customer lending out $30,000 worth of USDT could expect a return of around $2,907 over a yearly period. By contrast, the average bank interest rate for interest checking accounts in the US is around 0.03% to 0.06%, a return of just $9 and $18 respectively for the same amount.

The settlement extends from the SEC’s investigation into BlockFi last year which came to blows over the lender’s high-yield interest-bearing crypto product.

New Jersey, Alabama, Kentucky, Vermont and Texas also took action last year after raising concerns over whether the lender’s product constituted illegal securities while accusing the platform of providing minimal protections for customers.

Prince noted that no client funds would be used to pay the fines, and that existing customers of the BIA will be unaffected.

Loading Tweet..

He added that BIA customers would see their accounts automatically converted to the new regulatory-compliant framework, dubbed “BlockFi Yield” when feasible.

This story was updated on Feb. 14, 2022 at 11:40 am ET with official comments from BlockFi

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


BUZZ holds shares of Coinbase, Robinhood and MicroStrategy


Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile


The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally


While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders


Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume


DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit