The US Securities and Exchange Commission (SEC) is investigating the need to register a high-yield savings product launched by the BlockFi service.
Bloomberg, citing its own sources, reports that the regulator is trying to find out whether high-yield savings accounts offered by the BlockFi cryptocurrency lending service fall under compulsory licensing. The annual yield on such accounts is 9.5%, which is ten times higher than the interest on bank deposits. At the same time, the volume of deposits by BlockFi and other similar companies exceeds $ 40 million.
The SEC argues that when a consumer invests in a “business as usual” for the purpose of generating income, an investment contract must be entered into, which falls under the jurisdiction of the regulator. The Commission says it is committed to protecting the interests of investors. Indeed, cryptocurrency accounts of BlockFi and other companies do not fall under US government savings insurance laws and, in the event of company bankruptcy, the investor could lose all funds.
The company’s website emphasizes that BlockFi is engaged in an “active dialogue” with various regulators. Bloomberg reporters have sent a request to co-founder Zack Prince whether the SEC is investigating BlockFi. However, Prince did not respond to the request.
BlockFi has previously faced regulatory bans in several US states. So, this summer, the New Jersey prosecutor’s office restricted the work of the service in the state, and then Vermont, Alabama and Texas joined the sanctions.
Recall that in September, the Coinbase cryptocurrency exchange canceled the launch of a similar cryptocurrency savings instrument after a warning from the regulator.
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