Dear Readers,
In what many inside and outside the Bitcoin space are considering a watershed moment, BlockFi, a crypto lending firm, has agreed to pay a $100 million fine to various regulators, including the U.S. Securities and Exchange Commission (SEC), and to stop offering its primary product, the BlockFi Interest Account, to new customers within the United States. People in favor of the development have espoused the belief that the settlement provides a significant amount of clarity for companies offering crypto banking services. Perhaps in their mind, clarity from a government regulator is its own reward, no matter the costs.
Setting aside the fact that the might of the SEC’s furor is no longer hanging over the head of BlockFi, its customers and its investors, it’s worth playing the devil’s advocate since it seems clear that this development is far from completely positive. In doing so, I hope that we can together pick apart a few pieces of the SEC’s argument as they established in their own press release:
