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SEC Stops BlockFi with $100M Settlement | Crypto Interest Account - YouTube
Channel: Stephanie Talks Money
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Hey there.
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We have some breaking news
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from the cryptocurrency world.
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It was just announced that BlockFi and the SEC
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have come to a settlement.
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This is the result of a months-long conflict
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between the SEC and BlockFi
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about its high interest yield savings accounts.
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Basically the SEC is saying that BlockFi
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is offering security type resources
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without it being a registered security.
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BlockFi argues that its risks聽
are known to the consumer
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and that is offering a product聽
that is not a security.
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Regardless of who is right
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and who is wrong in this situation
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I'm just going to tell you the facts
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and how it affects you.
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The terms of this settlement were pretty clear.
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BlockFi will be required聽
to pay 100 million dollars
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and it will no longer be allowed to offer
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high interest yield accounts to US citizens.
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This will be a huge blow to BlockFi
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as it will no longer have new customers coming in
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and signing up for accounts and depositing money.
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However BlockFi has insisted that those
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that have existing interest accounts with them
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will continue to earn interest
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and their accounts will be okay.
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If you don't have a crypto interest account
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and you want to try and swoop in
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before they're no longer聽
allowed to open accounts anymore
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you can check out the link聽
in my description box below.
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I don't know if you can still sign up
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for an account there or not.
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Because I already have an account
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I can't really open an account and see.
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So if you try to open an account
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let me know in the comments below if it works.
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So i'm not here to argue who is right
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and who is wrong
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but I will offer my opinion on
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how this affects the crypto market
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and you as a consumer.
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First for BlockFi this is pretty bad news.
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BlockFi is relying on customers
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to deposit their money
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so they can loan it out
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and make money from crypto loans.
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BlockFi still has its existing customers
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but it won't be allowed to bring in new customers
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which means it's not going聽
to grow very much anymore.
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Also it has to pay this 100 million dollars.
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I'm not quite sure where
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this 100 million dollars is coming from
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but my bet would be that they would
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have to lower interest rates in the future.
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So if you do have a crypto聽
interest account with BlockFi
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you might want to check every once in a while
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and see how your interest rate is doing.
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Now for other companies
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offering crypto interest accounts
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like Gemini or Celsius,
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these companies are going to be in trouble.
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BlockFi is the first.
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These companies will come soon after.
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I will guarantee you the SEC
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is going to come after every聽
single one of these companies
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because if they did it to BlockFi
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they can do it to them.
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So even if you were to open accounts
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with another brokerage
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or just try and move your money around
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I'm pretty sure this is going聽
to start happening industry-wide
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at least in the United States.
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Is this the death of crypto聽
high-yield savings accounts?
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Possibly.
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At least in the US.
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The SEC has essentially barred these products
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from being created in the future.
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Although existing ones can continue.
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Now I don't know if it will be profitable enough
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for these companies to continue to pay
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these high interest rates
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with the money that they have
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and these companies still have the opportunity
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to grow outside the US.
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This is just US government getting involved.
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So BlockFi and other companies
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could have citizens of other countries
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open accounts if that is聽
something that they can swing.
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If they get new customers
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from other regions outside the US
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they can increase their customer base,
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increase their cash flow,
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and increase the amount
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they're lending out to others in crypto
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and that means that the high-yield聽
interest rates can stay.
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How I see this is the only way that BlockFi
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and these other companies
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can continue to grow and not shrink
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is to offer their products outside of the US.
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By the SEC and BlockFi reaching this settlement
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it pretty much seals the deal
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on all crypto interest accounts
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that they will not be allowed聽
to be created in the future
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and that is for the US only.
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And you might be wondering
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How did this happen?
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Why is the SEC allowed to do this?
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and various questions along those lines.
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Well let's let conspiracy theorist Stephanie
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take the reins.
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Keep in mind everything I'm about to say
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is my own opinion and that's it.
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If you happen to agree with me
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let me know in the comments below.
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I think the government is trying to stop BlockFi
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from offering these huge interest rates.
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And when I say government
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I'm not meaning a political party or a person.
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I mean people with big money.
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Government institutions
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bank executives.
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They're all in the same circles
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and they all have the same goal in mind
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which is to keep money in their pockets
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and not yours.
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So I think the government wants to
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shut down BlockFi and others
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that offer crypto high-yield savings accounts
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because they realize that they are a threat.
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By preventing new customers
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from opening high-yield savings accounts,
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these customers will now have nowhere
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to put their extra cash
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except for in the bank.
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And that means the bank gets more money.
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These interest rates are unparalleled
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to anything we see in the financial industry.
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I mean 9% is so huge compared to
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the best bank offering of 0.5%.
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People are starting to move聽
their money out of banks
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and into crypto interest accounts.
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I've done this myself.
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I took half my emergency fund out of my bank
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and I put it into a crypto interest account
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because I'm getting pretty much 9 times
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the amount of money.
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This hurts the banks.
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The banks are losing capital
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that they can loan out and make money
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and this is a huge threat to banks.
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Imagine if we had multiple different platforms
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like BlockFi, Celsius, Gemini
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all pop up and offer way聽
better services than banks.
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What would we do?
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We would all go take our money to these platforms
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leaving banks in the dust.
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And the bank executives can't have that.
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They sic the SEC onto these platforms
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to try and stop them
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and that is essentially what聽
happened in this situation.
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We have found a way to make more money
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and the government doesn't want us to do it.
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I think this is a really unfortunate outcome.
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I am a BlockFi customer.
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I will continue to be a BlockFi customer
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and I think that this聽
ruling/settlement with the sec
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only hurts the average consumer
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and it does not help us.
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Yes it is a bit of a conspiracy theorist rant
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but it is what I believe.
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And if you enjoyed this impromptu video
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with a little bit of news
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peppered with commentary
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let me know in the comments below
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and maybe I'll do another one.
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