Mississippi Secretary of State Michael Watson has announced his office’s Securities Division joined 31 other state regulators and the SEC in a $100 million settlement with the digital-asset financial services company BlockFi Lending LLC (BlockFi). The settlement relates to cryptocurrency offerings made to Mississippians.
Regulators found BlockFi issued securities not registered with the Securities Division nor exempt from registration requirements. The securities, called “BlockFi Interests Accounts” (BIAs), offered monthly interest to investors who set up accounts in which they deposited digital assets. As a result, investors were sold unregistered securities in violation of state law and deprived of critical information and disclosure necessary to understand the potential risks of these lending products.
“Nearly 900 Mississippians invested more than $5 million with BlockFi” said Secretary Michael Watson. “Our team recognizes the value new technology brings to financial markets. However, complying with existing laws and regulations is not a choice, but a necessary step to promote competitive capital markets and continued investor protection.”
BlockFi’s $943,396.22 payment to Mississippi is part of a larger settlement in which BlockFi agreed to pay $50 million to state securities regulators and $50 million to the SEC. Our Securities Division is one of 32 North American Securities Administrators Association (NASAA) member agencies that agreed to settle with BlockFi, and more jurisdictions are expected to follow.
As part of the agreement, BlockFi agreed to cease offering the cryptocurrency interest accounts in Mississippi until properly registered. BlockFi may continue to deploy digital assets for existing BIA investors and may continue to pay interest. Between February 14th and the date BlockFi’s securities are registered and qualified or permitted for sale with the states and SEC, current investors may keep their existing investments with BlockFi and will continue to earn interest under their initial agreement with the company. This measure is designed to protect the interests of existing investors while allowing BlockFi time to bring itself into compliance with securities laws.
The Secretary of State’s Office encourages investors to reach out with any concerns about cryptocurrency-related offerings. To do so, please contact our Securities Division at 601-359-1334 or securities.customerservice@sos.ms.gov.
Bob Bakken is the most recognized and most trusted name in DeSoto County news and sports reporting, as readers continue to express their appreciation for his accuracy and fairness in the stories he writes. Bob is also heard on 95.3 The Rebel twice a week with sports updates and high school football play-by-play broadcasts in the fall. A former newspaper editor and writer, his award-winning background also includes television news producing, sports media relations, and radio broadcasting.
