Just two weeks after being fined by Iowa regulators for offering and selling unregistered securities, crypto lending platform BlockFi announced on Tuesday that it has received a money services license in the state.
Iowa license will allow crypto lender to receive money and sell payment instruments in the state. BlockFi stated on Twitter that will start by allowing Iowans to trade stablecoins.
We’re excited to announce that we’ve received our Money Services License in Iowa.
Iowa residents can now trade stablecoins on our platform and instantly transfer funds via ACH. pic.twitter.com/sNEFIlCeWY
— BlockFi (@BlockFi) June 28, 2022
We are excited to announce that we have received our money services license in Iowa. Iowans can now trade stablecoins on our platform and transfer funds instantly via ACH. pic.twitter.com/sNEFIlCeWY
BlockFi did not mention whether the license would cover its yield-generating product.. According to BlockFi, its interest accounts have not been registered and are not offered or sold in the United States.
Previously, on June 14, the Iowa Insurance Division (IID), responsible for securities sales in the state, fined BlockFi more than $943,000 for violations of the state’s Securities Act. The IID alleged that BlockFi had “offered and sold securities in Iowa that were not registered or permitted for sale in Iowa,” in addition to not having registered as a broker or dealer.
The fine was part of a larger sanction imposed by the United States Securities and Exchange Commission (SEC) in February for failing to register an offering of high-yield interest accounts that the commission considered securities.
The fine was one of the largest penalties ever imposed by a federal regulator on a cryptocurrency business. BlockFi had to pay $100 million in settlements; paid half to the SEC and half to 32 states that brought similar charges.
Shortly after, BlockFi said that it intended to register with the SEC for a cryptocurrency security of interest for its US clients. to replace your current offering of interest accounts.
The new license is a bolt of good news for BlockFi, which has struggled alongside other blockchain and cryptocurrency companies. on worsening market conditions and falling cryptocurrency prices.
On June 16, BlockFi was one of the lending companies that was forced to liquidate some of the positions of the venture firm Three Arrow Capital (3AC)as the latter was unable to meet a margin call on its bitcoin (BTC) loans.
Celsius, a rival cryptocurrency lending platform, halted customer withdrawals on June 13, attributing the decision to market conditions. Subsequently, other reports indicated that the company was facing liquidity problems and would soon be doomed to insolvency.
These conditions have also seen a round of layoffs from blockchain and cryptocurrency companies. BlockFi CEO Zac Prince said on June 14 that he would lay off 20% of his staff to remain profitable.. What effect the SEC’s financial sanctions had on the decision is unknown.
A week later, On June 21, BlockFi received a lifeline from cryptocurrency exchange FTX, which signed a $250 million revolving credit agreement to bolster the company’s balance sheets and strengthen the platform..
Days later, it was reported that FTX might be in talks to buy a stake in BlockFi., although a BlockFi spokesperson told Cointelegraph on June 24 that it “does not comment on market rumors” and is “still negotiating the terms of the deal.” In the meantime, shareholders are reportedly unhappy with the move as it would wipe out shareholders’ equity.
It has recently been reported that Anthony Pompliano’s investment firm Morgan Creek is trying to put together a $250 million alternative deal to buy a majority stake in BlockFi.
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