SEC Hits Crypto Firm BlockFi with $100 Million in Penalties
Posted 02/22/22
Cryptocurrency
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February 14, 2022
BlockFi, Inc. will pay a total of $100 million to resolve SEC and state claims arising from its sale to retail customers of cryptocurrency lending products, including its BlockFi Interest Accounts. Through the “BIAs,” investors lent cryptocurrency assets to BlockFi in exchange for the company’s promise to provide a variable monthly interest payment. The SEC alleged that the BIAs were securities, offered without registration, that BlockFi operated as an unregistered investment company, and made false and misleading statements about risk levels. The total settlement includes a $50 million SEC civil penalty and $50 million to be divided equally between U.S. jurisdictions that are members of North American Securities Administrators Association. SEC; NASAATop Ten SEC and CFTC Recoveries of 2021
Posted 01/7/22
Is the privatization of whistleblower programs a trend?
Posted 12/3/21
October 15, 2021
iFinex Inc. and related entities doing business as cryptocurrency trading platform Bitfinex, agreed to pay $1.5 million to resolve charges that they operated as an unregistered futures commission merchant (FCM) and engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S. persons that were not eligible contract participants (ECPs). The CFTC found that Bitfinex allowed margin trading financed through a peer-to-peer funding program through which Bitfinex customers who held fiat or cryptocurrency in their Bitfinex account would “lend” those funds to other Bitfinex customers who would then use those funds to buy, sell, and trade on the Bitfinex platform, in violation of a 2016 CFTC order. CFTCOctober 15, 2021
Tether Holdings Limited and related entities, issuers of the “Tether Token” or USDt, have agreed to pay a civil monetary penalty of $41 million to resolve allegations that they violated the CEA and CFTC regulations by making untrue or misleading statements and/or omitting material facts through statements that Tether maintained sufficient U.S. dollar and other fiat currency reserves in bank accounts to back every USDt in circulation. In fact, Tether did not hold sufficient currency reserves at all times. The reserves were inadequate in amount, and were not held in currency in bank accounts, but instead included unsecured receivables and non-fiat assets, which were held by unregulated entities and third-parties including Bitfinex, which commingled reserve funds with operational and customer funds. The CFTC also found that Tether failed to perform routine professional audits as represented. CFTCSeptember 28, 2021
Payward Ventures, Inc., d/b/a Kraken has been ordered to pay a $1.25 million civil monetary penalty for violating the Commodity Exchange Act. According to the CFTC, for a year ending in July 2021, Kraken illegally offered commodity transactions in retail assets, despite failing to register as a futures commission merchant. CFTCSeptember 13, 2021
GTV Media Group Inc., Saraca Media Group Inc., and Voice of Guo Media Inc. will collectively pay more than $539 million to resolve SEC and New York State claims related to their alleged unregistered offering of GTV common stock and a digital asset security referred to as G-Coins or G-Dollars. The SEC found that the respondents publicized the two offerings on their websites and social media platforms, raising approximately $487 million from more than 5,000 investors. No registration statements were filed, and no registration exemption applied. Without admitting or denying the SEC’s findings, respondents agreed to pay disgorgement of $486 million plus interest, and penalties totaling $35 million. SEC; NYSEC Chairman Views Cryptocurrency Markets as the “Wild West” and Calls for More Investor Protection
Posted 08/13/21
