BlockFi wins money services license in Iowa
BlockFi, a New Jersey-based crypto lending platform, has received a money services license in Iowa, the company announced June 28.
We're excited to announce that we’ve received our Money Services License in Iowa.Iowa residents can now trade stablecoins on our platform and instantly transfer funds via ACH. — BlockFi (@BlockFi) June 28, 2022
Prior to securing this license, BlockFi faced a $943,000 fine from the Iowa Insurance Division. This fine was part of a larger penalty, which saw BlockFi agree to pay $100 million to settle with the U.S. Securities and Exchange Commission and the securities regulators of 53 states after offering and selling securities without registering as a broker-dealer or agent.
Are cracks beginning to form?
Despite having to part with $100 million amid a bear market that has seen companies like Celsius, Voyager, and Three Arrows Capital (3AC) face liquidity problems, BlockFi is operating normally, according to its CEO Zac Prince.
Nonetheless, Prince recently announced that BlockFi had secured a $250 million revolving credit facility from leading crypto exchange FTX. According to him, BlockFi planned to use these funds to strengthen its balance sheet.
Soon afterward, a WSJ report disclosed that FTX is in talks to acquire a stake in BlockFi. However, the companies did not reach an agreement.
Commenting on this news, a BlockFi spokesperson said,
BlockFi does not comment on market rumors. We are still negotiating the terms of the deal and cannot share more information at this time. We anticipate sharing more on the terms of the deal with the public at a later date.
Meanwhile, Morgan Creek Digital is trying to raise $250 million to purchase a majority stake in BlockFi, CoinDesk reported on June 26, citing a leaked investor call. Through these efforts, the company seeks to prevent losing its investment in the crypto lending platform.
Reportedly, Mark Yusko, Morgan Creek Digital’s Managing Partner, believes the FTX offer might topple BlockFi’s current shareholders. According to him, the term sheet offers FTX an option to buy BlockFi “at essentially zero price”; if FTX were to use this option, it would wipe out all BlockFi stakeholders.
Jinia is a fintech writer based in Stockholm, Sweden. With years of experience, she has written about cryptocurrency and blockchain for renowned publications such as Cointelegraph, CoinMarketCap, Bitcoinist, Invezz, etc.Source