BlockFi, a crypto lending platform, has agreed to pay $100 Million to settle ongoing investigations by the Securities and Exchange Commission and various state regulators in the United States.

BlockFi has been accused of offering an illegal product in which consumers are paid high interest rates in exchange for locking up their crypto tokens.

The Securities and Exchange Commission is expected to receive $50 Million, with the remaining $50 Million going to state regulators in the United States.

As a result, BlockFi is suspending its high-yield offering for the bulk of its users in the United States.

BlockFi’s main business offering was high returns for locking up Bitcoin, Ethereum and Tether with users being paid interest rates ranging from 5% to 10%. BlockFi then used those users’ tokens to lend out again at an even higher rate.

The Securities and Exchange Commission alleged in November that these BlockFi interest accounts fall in the category of unregistered securities.

BlockFi executives claim that they can provide such high interest rates to users as institutional investors will pay them much more to borrow those deposits.

However, crypto-interest accounts, unlike bank accounts, are not insured by the federal government.

This is not BlockFi’s first time falling in the crosshairs of U.S. regulators.

In 2021, state officials from BlockFi’s home state of New Jersey, as well as regulators from Vermont, Alabama and Texas all took on the company in some form. Some issued cease-and-desist orders, while others issued show-cause orders.

The main concern that drew the attention of the Securities and Exchange Commission, was the offering of unregistered securities.

When a consumer invests in an investment product or “in a common enterprise,” as the Securities and Exchange Commission refers to it, the Securities and Exchange Commission considers it to be an investment contract. An investment contract is regulated by the Securities and Exchange Commission.