Türkçe
Español
The Securities and Exchange Commission (SEC) has resolved its allegations against Nashville-based Linus Financial regarding its crypto lending product, Linus Interest Accounts. Interestingly, the SEC has chosen not to impose any civil penalties on the company. The reason for the federal regulator’s decision is attributed to Linus Financial’s close cooperation and prompt resolution of the issue.
SEC and Linus Financial Reach Agreement
In March 2020, SEC introduced Linus Financial’s Linus Interest Accounts. These accounts allowed US investors to convert fiat currency into cryptocurrencies. Although Linus Financial promised interest payments, the SEC classified these accounts as securities and notified the company of the need for registration.
Following the SEC’s move, Linus Financial ceased offering these accounts to potential investors as of March 25, 2022. Additionally, the company initiated a process that allows existing investors to withdraw their investments by the end of April 2022, providing a full refund guarantee.
The SEC appreciated the company’s swift response to the request and problem-solving measures. While Linus Financial’s assumption of responsibility is crucial, Stacy Bogert, Deputy Director of the SEC’s Division of Enforcement, stated that the federal regulatory agency expects companies to cooperate and resolve issues promptly. Bogert said, “Today’s agreement provides a significant reminder of the importance of cooperation and remediation.”
SEC’s Collaborative Approach
At a time when market participants accuse the SEC of using enforcement actions as a backdoor instead of creating clear laws, the regulator’s approach to Linus Financial stands out.
This development occurs amidst heated debates over the SEC Stability Act, which aims to reorganize the agency and potentially remove current Chairman Gary Gensler from his position. Consequently, this case targeting Linus Financial and the resulting resolution offer a fresh perspective on the broader discussion of cryptocurrency regulation.
Despite all obstacles, the SEC seems willing to enable a collaborative approach rather than a punitive one towards new financial products in the cryptocurrency market.
Hi