In a June 14 press release, the Iowa Insurance Division mentioned the penalisation of crypto trading firm BlockFi for $943,000.
The order came out after the Securities and Exchange Commission (SEC) of the United States and securities regulators from 53 countries that are part of the North American Securities Administrators Association (NASAA) finished an investigation that took place in multiple states.
According to the news announcement, BlockFi will also pay $50 million in settlements to the SEC and another $50 million to the 53 countries under investigation. The corporation has also been ordered to stop making deceptive statements about securities.
“While innovations, such as cryptocurrencies, may provide for growth and evolution in the financial system, it is important that regulators ensure this occurs within an appropriate framework that protects investors while still facilitating responsible capital formation,” said Iowa Insurance Commissioner Doug Ommen in a press release.
As per the ongoing inquiry, the lending platform BlockFi issued and sold unlicensed securities while misrepresenting the risk level in its loan portfolio.
As per the data, about 24%of BlockFi’s institutional crypto loans in 2019 were over-collateralized, as were 16% of loans in 2020 and 17% of loans in the first half of 2021.
