BlockFi Hires Arnold and Porter Kay Scholer After SEC Fine

Reuters reminds what BlockFi has been fined $100 million by the SEC or the Securities and Exchange Commission for regulatory fees. To address this issue, BlockFi hired law firm and lobbying firm Arnold & Porter Kaye Scholer.

Reuters reports BlockFi hires lobbying firm after record SEC fine

Why should BlockFi pay the SEC a $100 million fine?

The SEC is now tasked with digital asset verification, a role previously held by Congress. Thus, its main task is to register DeFi lending protocols as a securities product.

As for BlockFi, it is a fintech company that offers interest-bearing cryptocurrency accounts. However, the SEC treats BlockFi interest-bearing accounts as unregistered securities. This accusation is often controversial due to the lack of a legal framework specific to crypto-related securities. In order to settle the dispute, BlockFi is resigning itself to settling the $100 million requested by the SEC by distributing the amount as follows:

  • $50 million fine for unregistered offers and sales of loan products
  • A $50 million fine will be paid in 32 states to settle charges based on the same facts.

This is a record fine in the world of cryptocurrencies. The purpose of the SEC is to legislate through punishment. As such, it sets a new standard in decentralized finance that other crypto companies should follow.

BlockFi Engages Lobbying Firm to Solve SEC Problem

Arnold & Porter Kay Scholer is a Washington-based law and lobbying firm. A team of five people has been assembled to help BlockFi adopt appropriate regulatory and tax policies for financial services that use digital assets.

Lobbying is a strategy carried out by a group of influence in the same sector of activity. Through these methods, they seek to protect their interests in front of political decision makers. Cryptocurrency has always been a growth area for lobbying. In 2021 alone, crypto companies spent $9 million lobbying to discuss industry interests with lawmakers. This is a decision that many cryptocurrency companies are making to anticipate possible problems with the SEC.

Conclusion

Considering vague and indistinct rules in in the field of digital assets, many companies operating in this sector are turning to lobbying. By doing so, they ensure compliance the latest legislation that governs cryptocurrencies in terms of regulation and taxation.

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Emil Stantina

Interested in investments and financial markets after business school in Chambéry, passion for cryptocurrencies was evident. Blockchain is definitely the universal tool of tomorrow.