Crypto firm BlockFi has been ordered to pay $943,396.22 by Iowa Insurance Commissioner Doug Ommen for failing to register as a securities agent among other things.
The commissioner issued a consent order against the company for ordering and selling securities in Iowa that were not registered or permitted for sale in the state.
The company was also charged for selling securities without being registered as a broker-dealer or agent.
“While innovations, like 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 Commissioner Ommen.
The U.S. Securities and Exchange Commissioner (SEC) and state securities regulators from 53 jurisdictions worked together as members of the North American Securities Administrators Association (NASAA) to investigate BlockFi.
Apart from the unauthorized selling of securities, BlockFi has also been charged with misrepresenting and omitting the level of risk in its loan portfolio. This held back its investors from having complete and accurate information to evaluate the risk of the investment.
BlockFi also stated in multiple web posts about its loans ‘typically’ being over-collateralized, however that was not the case.
The company will thus pay a total of $50 million to the 53 states and another $50 million to the SEC.
The SEC has been cracking its whip and working to ensure that all the players in the crypto industry are compliant with the existing laws. Infact, the global crypto exchange Binance is also under investigation by the SEC over its native token BNB.
