The United States Securities and Exchange Commission (SEC) declared it won’t impose civil penalties on Linus Financial for its unregistered crypto lending product. This decision comes as a result of the firm’s swift cooperation and corrective actions.
“At no point has Linus filed a registration statement with the Commission for the offer and sale of the Linus Interest Accounts. Nor did the offer and sale of the Linus Interest Accounts qualify for an exemption from registration,” the filing explained.
Linus Financial SEC Action Sends A Warning To The Industry
In a September 7 statement, The SEC revealed that it will not be pressing charges against Linus Financial. However, it intends to strongly convey a message to companies offering crypto lending products without the proper licenses.
The statement noted,
“Today’s settlement provides a valuable message to other market participants about the importance of cooperation and remediation.”
The statement explains that Linus Financial halted its crypto lending product after the SEC took regulatory action against a similar crypto lending product.
Up until then, Linus was allowing US investors to deposit cash with the firm, in exchange for promised rates of return. Linus would then use those funds to purchase crypto assets, producing profits for both the company and investors.
“Linus Financial converted investors’ cash into crypto assets, pooled the crypto assets, and controlled how the pooled assets were used to generate income for Linus Financial itself and for investors’ interest payments”
Upon realizing this, Linus allegedly stopped offering crypto lending accounts to new investors. It also requested that existing investors withdraw their funds within the next 30 days. “All investor funds have since been withdrawn,” the statement added.
Stacy Bogert, Associate Director of the SEC’s Division of Enforcement, commented on the matter.
She clarified that the SEC is still actively pursuing companies offering crypto products without the required licenses. “The SEC will continue to hold companies accountable for failing to comply with federal securities laws,” Bogert stated.
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.
#Linus #Financial #SEC #Charges #Settled #Crypto #Lending #Product