BlockFi, a New Jersey-based crypto lending platform, has received a money services license in Iowa, the company announced on June 28.
We are thrilled to announce that we have received our Iowa Money Services License.
Residents of Iowa can now trade stablecoins on our platform and instantly transfer funds via ACH. pic.twitter.com/sNEFIlCeWY
—BlockFi (@BlockFi) June 28, 2022
Prior to obtaining this license, BlockFi was fined $943,000 by the Iowa Division of Insurance. The fine was part of a larger penalty, which saw BlockFi agree to pay $100 million to settle with the US Securities and Exchange Commission and securities regulators in 53 states after offering and selling securities without registering as a broker or agent.
Cracks starting to form?
Although it had to part with $100 million in a bear market that saw companies like Celsius, Voyager and Three Arrows Capital (3AC) face liquidity issues, BlockFi is operating normally, according to its CEO Zac Prince .
Nonetheless, Prince recently announced that BlockFi has 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.
Shortly after, a WSJ report revealed that FTX was in talks to acquire a stake in BlockFi. However, the companies did not reach an agreement.
Commenting on the news, a BlockFi spokesperson said:
BlockFi does not comment on market rumours. We are still negotiating the terms of the deal and cannot share more information at this time. We plan to share more information about the terms of the agreement with the public at a later date.
Meanwhile, Morgan Creek Digital is trying to raise $250 million to buy a majority stake in BlockFi, CoinDesk reported on June 26, citing a leaked investor call. Through these efforts, the company seeks to avoid losing its investment in the crypto lending platform.
There are reports that Morgan Creek Digital managing partner Mark Yusko believes the FTX offer could upset current BlockFi shareholders. According to him, the term sheet gives FTX an option to buy BlockFi “at virtually zero price”; if FTX used this option, it would eliminate all BlockFi stakeholders.