Crypto Firms Seek Clearer US Rules on Their Interest-Bearing Products
Published on April 28, 2022 at 02:12AM
Cryptocurrency companies said they remain unsure of U.S. regulations governing products that allow customers to earn interest on holdings instead of trading them, months after such an interest-bearing product drew a $100 million fine from a federal regulator and state governments. From a report: In February, New Jersey crypto company BlockFi agreed to pay $100 million in a landmark settlement with the U.S. Securities and Exchange Commission and state authorities who said its interest-bearing product qualifies as a security and should have been registered. Still, many digital asset companies providing such products said this month the rules remain unclear to them and they are uncertain when they should register such offerings, which are growing more popular and which many firms launched within the last year. Most firms have tried to structure the interest-bearing products to avoid the need to register them with the SEC, a process that takes time and entails ongoing disclosure and reporting obligations. That effort might set them up for a clash with the agency as it increases scrutiny of the crypto industry. BlockFi plans to offer an alternative yield product, which it said it would register first. The company and the SEC said the deal should provide a roadmap for other companies.
Published on April 28, 2022 at 02:12AM
Cryptocurrency companies said they remain unsure of U.S. regulations governing products that allow customers to earn interest on holdings instead of trading them, months after such an interest-bearing product drew a $100 million fine from a federal regulator and state governments. From a report: In February, New Jersey crypto company BlockFi agreed to pay $100 million in a landmark settlement with the U.S. Securities and Exchange Commission and state authorities who said its interest-bearing product qualifies as a security and should have been registered. Still, many digital asset companies providing such products said this month the rules remain unclear to them and they are uncertain when they should register such offerings, which are growing more popular and which many firms launched within the last year. Most firms have tried to structure the interest-bearing products to avoid the need to register them with the SEC, a process that takes time and entails ongoing disclosure and reporting obligations. That effort might set them up for a clash with the agency as it increases scrutiny of the crypto industry. BlockFi plans to offer an alternative yield product, which it said it would register first. The company and the SEC said the deal should provide a roadmap for other companies.
Read more of this story at Slashdot.
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