With $100 million settlement confirmed, BlockFi aims to register Yield with SEC

The Securities and Exchange Commission announced Monday that it fined crypto lending firm BlockFi $100 million, and now the firm plans to register with the agency to offer clients its popular high-yield crypto savings product. 

As a condition of a $100 million settlement with the SEC as well as state securities regulators, the firm has announced plans to file an S1 to offer BlockFi Yield to US investors as a security. 

We intend for BlockFi Yield to be a new, SEC-registered crypto interest-bearing security, which will allow clients to earn interest on their crypto assets,” BlockFi CEO Zac Prince said in a press release. 

Bloomberg reported on Friday that the firm would have to discontinue its high-yield account for customers in the US, but this news suggests the company will offer the product under a new name and with the blessings of regulators. 


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

SEC Chair Gary Gensler, in the agency's announcement of the settlement, said "This is the first case of its kind with respect to crypto lending platforms. Today’s settlement makes clear that crypto markets must comply with time-tested securities laws."

In the meantime, BlockFi says that existing US clients will be able to earn interest in their existing accounts but won’t be able to add more assets. Non-US users are unaffected.

While US bank savings accounts are not subject to securities laws, they are required to offer FDIC insurance. Crypto lending platforms like BlockFi have generally compared themselves to bank accounts offering returns of up to 8%, as compared to sub-1% returns in traditional savings account. They have, however, not had FDIC insurance, which has rankled regulators like the SEC, who call these investment products akin to a mutual fund or other financial product. 

Starting last summer, a series of state securities regulators filed actions against BlockFi, which is one of the largest such yield platforms in the country. Around the same time, the federal SEC shut down Coinbase’s attempt to launch its own yield offering. Coinbase CEO Brian Armstrong lashed out at the SEC on Twitter over the commission's decision and opacity in its decision making. 

About Authors

Kollen Post is a senior reporter at The Block, covering all things policy and geopolitics from Washington, DC. That includes legislation and regulation, securities law and money laundering, cyber warfare, corruption, CBDCs, and blockchain’s role in the developing world. He speaks Russian and Arabic. You can send him leads at [email protected].
Frank Chaparro is Host of The Scoop podcast and Director of Special Projects. He also writes a biweekly newsletter. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. For inquiries or tips, email [email protected].