Over the past few months, the cryptocurrency market has struggled, with Bitcoin (BTC) plunging more than 50% from its November ATH before finding support in recent weeks. Increased regulatory scrutiny, sentiment towards the Fed's monetary policy and geopolitics weighed on investor sentiment.
The SEC's scrutiny of cryptocurrencies is on the rise
For Ripple and XRP, however, it was a more promising start to the year. News updates on the SEC vs Ripple case provided strong support, with XRP revisiting $ 0.91 levels prior to the latest reversal.
In addition to Ripple, the SEC has targeted other names including Poloniex, Blockchain Credit Partners, and BitConnect, which closed in 2018. Coinbase (COIN) also came under SEC fire in 2021 over plans to launch a lending program. of digital assets.
In early January, SEC President Gary Gensler announced that cryptocurrency exchanges will face more SEC scrutiny.
With the SEC v. Ripple case underway and gathering momentum, some big wins for the SEC could test investor recent optimism about the SEC v Ripple outcome. Hopes for a favorable deal have been key to XRP's gains this year. Year to year, XRP was up 5,63% through Tuesday, February 8. On the contrary, Bitcoin (find out how buy Bitcoins) fell 4,58% over the same period.
BlockFi agrees with the SEC
While the SEC v. Ripple case has been ongoing since 2020, BlockFi came under the SEC's microscope in November last year. The SEC argued that BlockFi's high yield accounts are unregistered securities.
Earlier this year, the states of Alabama, Kentucky, New Jersey and Vermont reported issuing show-cause or cease-and-desist orders asking the platform to stop offering its products to residents of the state. The orders from the 5 states are likely to have brought BlockFi into the SEC's sights.
Over the weekend, Bloomberg reported that BlockFi agreed to pay a $ 100 million fine. The deal would be among the largest paid for by a cryptocurrency company. BlockFi, headquartered in New Jersey, will also need to stop offering high yield accounts to US residents. BlockFi users can earn up to 9,25% APY in crypto with a BlockFi interest account.
At the time of writing, there were no references to the SEC settlement on BlockFi's website. However, there were details about the New Jersey termination and warning order and the other 4 states' warning orders.