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BlockFi, a cryptocurrency lending platform, declared on June 28 that it had been granted a Money Services License in Iowa, just two weeks after being penalized by Iowa regulators for marketing and selling unregistered securities. The crypto lender can buy and sell payment instruments in Iowa, thanks to the state's license. BlockFi announced on Twitter that it would start by enabling stablecoin trading for citizens of Iowa. https://twitter.com/BlockFi/status/1541787388778844160
BlockFi Fined For Violations of the State's Securities Act
BlockFi was previously penalized more than $943,000 for violations of the state's Securities Act on June 14 by the Iowa Insurance Division (IID), which oversees securities transactions in the state. Moreover, failing to register as a broker-dealer or agent, IID said BlockFi had "offered and sold securities in Iowa that were neither registered nor permitted for sale in Iowa." The United States Securities and Exchange Commission (SEC) levied hefty penalties in February for failing to register an offering of high-yield interest accounts that it believed to be securities. One of the highest fines ever levied against a crypto company by a federal agency.
BlockFi Fine Settlement
BlockFi slams with settlements totaling $100 million, which paid half to the SEC and the other half to 32 states that had filed identical complaints. The new license is good news for BlockFi, and the firm struggled with crypto companies during the worse market condition. When venture capital firm Three Arrows Capital (3AC) failed to meet a margin call on its borrowings of Bitcoin (BTC) on June 16, BlockFi was one of the leading companies forced to liquidate some of its positions from the firm. BlockFi received a lifeline from cryptocurrency exchange FTX a week later, on June 21, when BlockFi agreed to a $250 million revolving credit facility to strengthen the company's balance sheets and the platform.