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Comment by jonathan-adly | Hacker News Reader

1. This is a PR win for the SEC. It can now go to congress and say, see, we are working with Crypto companies! (while they really aren't, not in good faith anyway).

2. This is a win for Blockfi. Like other mentions, they gave their business a legal veneer for the sum for $100m. If you are of the opinion that all Cryptos and related companies are scams. Guess what? The SEC disagrees.

3. The same product (even better actually) is done via DeFi. That's where the real battle will be with major implications on the Ethereum ecosystem (or whatever Dapp blockchain you prefer).

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Definitely not a win for BlockFi. Definitely not an endorsement of crypto by the SEC. As part of the settlement, BlockFi had to agree to stop doing all that illegal stuff.

"To settle the SEC’s charges, BlockFi agreed to pay a $50 million penalty, cease its unregistered offers and sales of the lending product, BlockFi Interest Accounts (BIAs), and attempt to bring its business within the provisions of the Investment Company Act within 60 days."

> BlockFi had to agree to stop doing all that illegal stuff

Have they though?

From Blockfi:

"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."

Sounds like existing accounts can continue to function and accrue interest but no addition new users or assets can be deposited until they get SEC approval.

> The same product (even better actually) is done via DeFi. That's where the real battle will be with major implications on the Ethereum ecosystem (or whatever Dapp blockchain you prefer).

The US gov could require teams based in the US to require KYC in their apps for US citizens. And they can require US citizens to only use apps with KYC. But can they really do much beyond that?

That would be in violation of the securities laws that blockfi is accused of violating.

Per this case, the SEC stand is interest bearing crypto -> a security

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