BlockFi is registering a new item that will work for users to receive interest but will be under regulation. Accounts capable of receiving interest valued in bitcoin get classified by the SEC as securities.
An agreement reached with SEC will allow the accounts opened in BlockF to receive interest valued in bitcoin. The information got revealed by the CEO of BlockFi, Zac Prince, who highlighted in a Twitter thread that already existing clients of the BIA or BlockFi interest account would achieve interests as usual.
On the other hand, the agreement sets up that, as of February 14, 2022, citizens residing in the United States of America will not be able to include new funds in their accounts or open new BIAs. In this way, the resolution will not be helpful to clients outside that nation and only works with BIA accounts.
Prince explained that the company has just begun a registration procedure with the SEC for a new item, called BlockFi Yield, which will be a substitute for the current BIA of the US users. The strategy is that once the registration gets ready to go, the BIA accounts will get exchanged for BlockFi Yield unless a client desires otherwise.
Once the strategy reaches its approval, new advanced payments and customer registrations in the US will operate through BlockFi Yield. Therefore, these new accounts would bring a service that will share similarities with the one in the BIA; they will allow receiving interests based on Bitcoin, but it would only work as an item regulated by the SEC.
BlockFi Gives at Least $100 Million to the SEC
The news appeared last weekend, highlighting that BlockFi would give the SEC at least a $100 million fine for carrying out activities with the BIA profiles. Although this information did not appear in the statement, the SEC assured the current situation on Monday. The agency highlights that the network counts on at least 60 days to get businesses to adjust to the Investment Company Act of 1940.
Gurbir S. Grewal stated that cryptocurrency lending platforms bringing securities like BlockFi’s BIAs should learn everything they need about the rules and adjust their policies to federal securities laws.
BlockFi operations faced a prohibition status in at least four US states, the SEC stated that the accounts that generate interest valued in bitcoin can get classified as securities and the firm does not have the required permission to bring these types of features.
This interpretation arrived due to the interest rate that users could receive by depositing assets on the network. By considering these profiles as securities, the state governments assure that it is an activity that must receive the required approval and get regulated by the authorized entity.
In its recent news, BlockFi assures that BIAs did not get registered at the Securities Act and might not get offered in a region like the United States of America to US persons.
BIAs does not have the permission required to get offered as a bringer of benefits to a regular citizen residing in the United States of America or in any region in which such proposal got prohibited.
By: Jenson Nuñez
