Surprise twist as BlockFi receives Money Services License in Iowa
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Despite a significant fine from Iowa’s regulator just two weeks earlier, BlockFi has scored itself a license in the state.
Just two weeks after being fined by Iowa’s 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.
The Iowan license will allow the crypto lender to receive money and sell payment instruments in the state. BlockFi on Twitter stated it will begin by allowing Iowan residents to trade stablecoins.
We're excited to announce that we’ve received our Money Services License in Iowa.
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 over $943,000 for violations of the state’s Securities Act. IID alleged BlockFi had “offered and sold securities in Iowa that were not registered or permitted for sale in Iowa” along with failing to register as a broker-dealer or agent.
The fine was part of a larger penalty brought by the United States Securities and Exchange Commission (SEC) in February for not registering an offering of high-yield interest accounts that the commission deemed to be securities.
The fine was one of the largest penalties ever imposed by a federal regulator on a crypto business. BlockFi was hit with $100 million in settlements, with half paid to the SEC and the other half to 32 states which brought forward similar charges.
Shortly after, BlockFi said it intended to register with the SEC for a crypto interest-bearing security for its U.S. customers to replace its current interest accounts offering.
The new license is a glimmer of good news for BlockFi which has struggled along with other blockchain and crypto companies in the worsening market conditions and falling crypto prices.
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