Oregon to receive nearly $1M in settlement from crypto firm BlockFi
SALEM, Ore. (KPTV) - As part of a settlement with securities regulators, cryptocurrency financial institution BlockFi agreed to pay a total of $100 million, and the state of Oregon will receive nearly $1 million from that settlement.
After an investigation that was led by a group of state securities regulators and the SEC, the Oregon Division of Financial Regulation (DFR) brought legal action against BlockFi for violations of the Oregon Securities Law.
According to the Oregon Department of Consumer & Business Services, BlockFi offered and sold securities in the state without being properly registered.
Department of Consumer & Business Services said the crypto firm overstated the degree to which it secured protection from defaults by institutional borrowers through collateral.
“BlockFi promised monthly interest rates of 6.2 percent, compounded each month with the possibility of earning up to 9.5 percent, depending on the type and size of investment. BlockFi told investors that loans were overcollateralized – having more collateral than is needed in order to reduce the risk to the investors – when, in fact, they were not. Approximately 24 percent of institutional digital asset loans made in 2019 were overcollateralized, 16 percent in 2020 and 17 percent through June 30, 2021,” the Department of Consumer & Business Services said in a statement.
As part of the settlement, BlockFi agreed to stop offering interest accounts in the United States and to stop accepting additional deposits from US customers to accounts that were already open. Oregon DFR got a total of $943,396 from the settlement.
“Financial services powered by cryptocurrencies must be held accountable just like any other financial institution,” said DFR Administrator TK Keen. “I am happy with the outcome here and we will continue to monitor businesses that try to take advantage of Oregonians or do business here illegally.”
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