Regulatory Developments

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BlockFi Interest Accounts (BIAs) have not been registered under the Securities Act and may not be offered or sold in the United States, to U.S. persons, for the account or benefit of a U.S. person or in any jurisdiction in which such offer would be prohibited.

BlockFi Enters Landmark Resolution with Federal and State Regulators Providing Clarity on Pathway for Crypto Interest Securities

BlockFi is first participant in new regulatory framework for crypto sector 

New product, BlockFi Yield, will be in the registration process with the U.S. Securities and Exchange Commission 

Jersey City, NJ – February 14, 2022 – BlockFi Lending, a subsidiary of BlockFi Inc., has entered into a resolution with both the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) providing regulatory clarity and a path forward for clients across the United States who want to earn interest on their crypto assets. As part of this resolution, BlockFi intends to file or confidentially submit a registration statement on Form S-1 with the SEC for the offering of BlockFi Yield (BY), which is anticipated to be the first SEC registered crypto interest-bearing security. 

Zac Prince, CEO and Founder of BlockFi, said: “From the day we started BlockFi, we have always known that strong engagement with regulators would be critical for the adoption of financial services powered by cryptocurrencies. Today’s milestone is yet another example of our pioneering efforts in securing regulatory clarity for the broader industry and our clients, just as we did for our first product – the crypto-backed loan. We intend for BlockFi Yield to be a new, SEC-registered crypto interest-bearing security, which will allow clients to earn interest on their crypto assets.”

BlockFi cooperated with the government’s investigation and implemented remediation actions. Both the SEC and state-level agreements contain no admission or denial of wrongdoing or liability.

As part of the resolution, existing U.S. BlockFi Interest Account (BIA) clients will maintain their accounts and receive interest as they always have, but cannot add new assets to their accounts as of today, February 14, 2022. Further, U.S. persons will not be able to open new BIAs. Following completion of the SEC registration process for BlockFi Yield, BIAs of U.S. clients will be exchanged for BlockFi Yield, unless a client instructs BlockFi otherwise. BIAs of BlockFi clients outside of the U.S. are not subject to today’s resolution.

BlockFi’s broad suite of retail and institutional products for existing and new clients continues to be offered worldwide, including: (i) buying and selling leading digital assets directly on BlockFi Trading; (ii) earning crypto rewards on the BlockFi Rewards Credit Card; (iii) accessing personalized crypto interest rates, trading costs and other terms to meet the individual objectives of high net worth individuals via BlockFi Personalized Yield; and (iv) originating US dollar loans secured by the value of digital assets on the platform through BlockFi Loans. Additionally, BlockFi is a leading lender and provider of trade execution services globally to institutions participating in digital asset markets through the BlockFi Prime platform. 

About BlockFi

BlockFi is a new breed of financial services company. Founded in 2017 by Zac Prince and Flori Marquez, BlockFi is building a bridge between cryptocurrencies and traditional financial and wealth management products to advance the overall digital asset ecosystem for individual and institutional investors. 

This communication does not constitute an offer to sell or the solicitation of an offer to buy BlockFi Yields or BIAs, and shall not constitute an offer or sale in any jurisdiction in which such offer or sale would be prohibited. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended (“Securities Act”). We have not yet filed or confidentially submitted a registration statement with the SEC and there can be no assurance that such a registration statement, when filed, will be declared effective.

The BIAs have not been registered under the Securities Act and may not be offered or sold in the United States, to U.S. persons, for the account or benefit of a U.S. person or in any jurisdiction in which such offer would be prohibited.

This communication contains “forward-looking statements”. which involve risks and uncertainties. You should not place undue reliance on forward-looking statements because they are subject factors which are difficult to predict. These forward-looking statements are generally identified by the use of “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “target,” “will,” “would” and similar expressions. Risks and uncertainties include, but are not limited to: anticipated trends and challenges in our business and the crypto ecosystem; our ability to comply with the terms and undertakings in the SEC and state settlements discussed above; and our ability to register the BYs with security regulators. We do not undertake to update any forward-looking statement as a result of new information or future events or developments.

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