The US Securities and Exchange Commission (SEC) is investigating high-yield products offered by crypto lending platform BlockFi, as per reports by Bloomberg.
The move came as many US states voiced out similar concerns over its product offering, which offers up to 9.5% in annual yields to users. According to its website, BlockFi is offering 9.5% interest to users on Tether holdings and 4.50% of Bitcoin holdings, outright surpassing the low-interest rates offered by traditional financial institutions.
While the report didn’t disclose many details, the SEC is reportedly probing whether the ‘high-yield crypto savings accounts’ provided by BlockFi are unregistered securities. If it is established that the products are securities, BlockFi may be charged with violating the Securities Law.
Texas, Alabama, New Jersey, Kentucky, and Vermont are some of the states where regulators have targeted BlockFi over its ‘unregistered securities offering’. On the other hand, the company has consistently denied violations of the securities law.