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<ul class="summary-list"><li>The <keyword id="11898795" type="UNKNOWN" weightage="60" keywordseo="sec" source="Orion">SEC</keyword> is probing <keyword id="12554310" type="UNKNOWN" weightage="60" keywordseo="blockfi" source="Orion">BlockFi</keyword> over its high-yield, interest-bearing accounts, Bloomberg reported.</li><li>The agency is set to determine whether BlockFi accounts are similar to securities.</li><li>The SEC has also sought information from dozens of other <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> firms in recent months, according to Bloomberg.</li></ul><ul class="summary-list"></ul>The US <keyword id="11898794" type="UNKNOWN" weightage="60" keywordseo="securities-and-exchange-commission" source="Orion">Securities and Exchange Commission</keyword> is probing cryptocurrency lending platform BlockFi over its high-yield, interest-bearing accounts, <a href="https://www.bloomberg.com/news/articles/2021-11-17/blockfi-faces-sec-scrutiny-over-high-yielding-crypto-accounts">Bloomberg</a> first reported Wednesday.The New Jersey-based firm has grown in popularity with such products. It offers <a href="https://blockfi.com/crypto-interest-account/">accounts</a> that let users earn annual yields as high as 9.5%, according to its <a href="https://blockfi.com/crypto-interest-account/" target="_blank" title="BlockFi interest account" rel="noopener">website</a>. In contrast, traditional savings accounts let holders earn a mere 0.06% annually. But unlike bank deposits, digital-asset savings accounts are not insured by the federal government.Sources told Bloomberg that this is the heart of the SEC's investigation: to determine whether BlockFi accounts are similar to securities. If so, these products must then be registered with the agency.The SEC has not accused BlockFi of any wrongdoing thus far.Still, this isn't BlockFi's first brush with authorities. <a href="https://markets.businessinsider.com/news/currencies/blockfi-crypto-platform-texas-alabama-new-jersey-interest-account-2021-7">Multiple states</a> have clamped down on the crypto lending platform for potentially violating securities laws with its high-yield accounts. New Jersey, Alabama, and Texas in <a href="https://markets.businessinsider.com/news/currencies/blockfi-crypto-platform-texas-alabama-new-jersey-interest-account-2021-7">July</a> said the platform did not register its BlockFi Interest Accounts, or BIAs, with state regulators and that they may be unregistered securities offerings.BlockFi, a private company valued at more than <a href="https://www.reuters.com/technology/blockfi-talks-raise-funding-about-5-bln-valuation-information-2021-06-08/">$4 billion</a> with over 500,000 retail accounts, offers a range of products to consumers. It has been backed by investors like Bain Capital and Tiger Global Management since its founding in 2017.The scrutiny over BlockFi comes in step with the regulator's growing oversight attempts. In recent months, the SEC has sent subpoenas and requests for information to dozens of crypto firms, sources told Bloomberg.Under the leadership of Chair Gary Gensler, the agency has been tightening the reins on the digital asset space. Its latest high-profile crackdown involved <a href="https://markets.businessinsider.com/stocks/coin-stock?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Coinbase Global</a> in September.After <a href="https://markets.businessinsider.com/news/currencies/coinbase-sec-crypto-sue-lend-regulation-brian-armstrong-sketchy-2021-9">threatening to sue</a> the largest US crypto exchange over a planned lending program, <keyword id="11895315" type="UNKNOWN" weightage="60" keywordseo="coinbase" source="Orion">Coinbase</keyword> quickly <a href="https://markets.businessinsider.com/news/currencies/coinbase-crypto-lending-program-sec-lend-abandons-usdc-apy-waitlist-2021-9">abandoned the initiative</a>. It was supposed to offer 4% interest on crypto holdings by lending out tokens.

SEC probes BlockFi as regulator mounts investigations across dozens of crypto firms, report says

<ul class="summary-list"><li><keyword id="7185672" type="UNKNOWN" weightage="60" keywordseo="blockfi">BlockFi</keyword> is trying to reverse course after accidentally depositing <keyword id="6354947" type="UNKNOWN" weightage="60" keywordseo="bitcoin">bitcoin</keyword> into users' accounts. </li><li>The crypto-lending start-up said fewer than 100 clients were incorrectly credited with cryptocurrency associated with a "promotional payout that did not belong to them."</li><li>A screenshot on Twitter appears to show one user received 700 bitcoin from BlockFi by accident. </li></ul>Cryptocurrency-lending start-up BlockFi is trying to reverse course after mistakenly sending some of its users bitcoin as part of a promotion.The company made incorrect promo payouts to certain customers. The company <a href="https://www.reddit.com/r/blockfi/comments/nfjrpt/with_the_recent_event_of_people_withdrawing_undue/gym797e?utm_source=share&amp;utm_medium=web2x&amp;context=3ontext=3">said</a> on Reddit on Tuesday that fewer than 100 clients were incorrectly credited with cryptocurrency associated with a "promotional payout that did not belong to them," and the situation will not affect BlockFi's ongoing operations.According to<a href="https://www.bloomberg.com/news/articles/2021-05-19/crypto-lender-mistakenly-deposits-bitcoin-into-user-accounts?srnd=markets-vp"> Bloomberg</a>, a number of recipients withdrew the coins before the company could backpedal. BlockFi CEO <keyword id="11287005" type="UNKNOWN" weightage="60" keywordseo="zac-prince">Zac Prince</keyword> said the firm's exposure is around $10 million, but noted that's decreasing as more users return the coins."BlockFi carries loss reserves as part of its accounting policies and this is a fraction of existing loss reserves - so no negative impact to equity or ongoing platform operations," Prince told Bloomberg. "The issue that caused the withdrawals was fixed and incremental safeguards have been developed to prevent any similar issue in the future."On Friday, the company<a href="https://twitter.com/BlockFi/status/1393372759758082049?s=20"> tweeted</a>: "Some clients who participated in the March trading promotion may see an inaccurate bonus payment displayed in their transaction history. Our team is working on a fix and the proper amounts will be reflected shortly."Several users commented in the Tweet replies that they received deposits of bitcoin. One screenshot showed a deposit of <a href="https://twitter.com/ricburton/status/1394850878742581251?s=20">700 bitcoin</a> on Friday. Another Reddit user said he found 30 bitcoins in his account. He said he checked to see if he could withdraw but the withdrawals and trades didn't work. Another Reddit <a href="https://www.reddit.com/r/blockfi/comments/nfhikf/falsely_accused_by_blockfi_of_crime_and_a/?utm_source=share&amp;utm_medium=web2x&amp;context=3ontext=3">user</a> said they received an email from BlockFi accusing them of withdrawing funds and threatening legal action. The user said they were attempting to withdraw USDC which they had deposited a month earlier, unrelated to the promo payment. BlockFi could not be immediately reached for comment.Read more: <a href="https://www.businessinsider.com/crypto-trading-investing-tips-crypto-tokens-hodling-trader-scott-melker-2021-5" target="_blank" rel="noopener">'Wolf of All Streets' crypto trader Scott Melker breaks down his strategy for making money using 'HODLing' and 100X trade opportunities - and shares 5 under-the-radar tokens he thinks could explode</a>

A crypto lender is trying to claw back bitcoin after accidentally depositing hundreds of coins into user accounts

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SEC probes BlockFi as regulator mounts investigations across dozens of crypto firms, report says

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A crypto lender is trying to claw back bitcoin after accidentally depositing hundreds of coins into user accounts

Emily Graffeo

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