Takeaways from the SEC’s $100M Fine Against FinTech Lender BlockFi
Brad Rustin, partner and chair of the Financial Services Regulatory Practice at Nelson Mullins, joined Tom Hagy, host of the Emerging Litigation Podcast, to discuss the SEC’s $100 million fine against retail crypto lender BlockFi Lending for failing to register the offers and sales of its retail crypto lending product.
As the first case of its kind with respect to a crypto lending platform, Rustin said the risk concerning BlockFi was materially different than what was presented to consumers, one of the reasons the company was fined. Rustin said the case isn’t isolated to BlockFi and serves as a warning to other crypto lending platforms offering securities.
“They will pick someone to go first, and they try to be more lenient with that person because it will serve as a warning shot to the industry,” he said. “Now that you’ve heard their position, number two gets more severe, and if you’re doing this exact model three years from now, they’ll likely throw the book at you.”
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